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Finding Quality Partners:
Moscow2004
Prepared by:
The Automotive Supplier Development Project TeamInternational Finance Corporation
A Review Of The RussianAutomotive Component Sector
3
TABLE OF CONTENTS
PREFACEPREFACE ............................................................................................................................................................. 7I. EXECUTIVE SUMMARYI. EXECUTIVE SUMMARY .............................................................................................................................. 8
1. Many Russian Automotive Component Suppliers are Making Quality Improvements to Join the International Industry ................................................... 82. International-Level Quality is Possible .......................................................................................... 83. Russia Is A Rapidly Growing Automotive Market ...................................................................... 104. Foreign Designs and Brands are the Future ................................................................................ 115. Government Policy Supports Domestic Production Ventures ............................................. 12
II. RUSSIAN AUTOMOTIVE MARKET OVERVIEWII. RUSSIAN AUTOMOTIVE MARKET OVERVIEW .................................................................................. 13Russia: Macroeconomic Overview ...................................................................................................... 13Russia: Automotive Market .................................................................................................................... 14
Russian Government Support To The Automotive Industry ................................................. 14Protective Tariff s ............................................................................................................................ 14Presidential Decree No. 135 ...................................................................................................... 14Russian Government Automotive White Paper ................................................................. 15
Rising Sales and Production Volumes ........................................................................................... 15
III. IFC SECTOR REVIEW: III. IFC SECTOR REVIEW: POTENTIAL SUPPLIER PARTNERSPOTENTIAL SUPPLIER PARTNERSAND CUSTOMERS IN RUSSIAAND CUSTOMERS IN RUSSIA ..................................................................................................................... 18
Review Methodology .............................................................................................................................. 18Main Findings ............................................................................................................................................. 20Toyota Production System (Lean Production) in Russia .............................................................. 21Company Profi les ...................................................................................................................................... 23
1 Avtoagregat ....................................................................................................................................... 232. Avtoarmatura ................................................................................................................................... 243. AvtoPribor Factory ......................................................................................................................... 254. AvtoTechnica .................................................................................................................................... 265. Detalstroykonstruktsiya (DSK) ................................................................................................... 276. Elara .................................................................................................................................................... 287. Energotekhmash ........................................................................................................................... 308. Intercos-IV ......................................................................................................................................... 319. Kaluga Plant of Automotive Electrical Equipment (KPAE) ............................................... 32
10. Kursk Bearings Company (KBC) ................................................................................................. 3311. Orleks .................................................................................................................................................. 3412. Osvar ................................................................................................................................................... 3513. Polimerstroimaterialy .................................................................................................................... 3614. Samara Cable Company .............................................................................................................. 3715. Samaraavtozhgut ........................................................................................................................... 3816. Soate ................................................................................................................................................... 3917. Soteks ................................................................................................................................................. 4018. Toplivnye Sistemy (Fuel Systems) ............................................................................................. 42
Table of Content4
19. Trek ...................................................................................................................................................... 4320. ZMZ .................................................................................................................................................... 4421. ZEiM-Line ......................................................................................................................................... 46
IV. RUSSIAN OEM REVIEWIV. RUSSIAN OEM REVIEW ........................................................................................................................... 47AvtoVAZ .................................................................................................................................................. 48RusPromAvto ........................................................................................................................................ 51
GAZ ................................................................................................................................................... 52KamAZ .................................................................................................................................................... 53SOK Group ............................................................................................................................................. 54
Izh-Avto ............................................................................................................................................ 55RosLada ............................................................................................................................................ 57
SeverStalAvto ....................................................................................................................................... 58Ulyanovsk Automobile Factory (UAZ) ................................................................................... 59
Moscow Group Holding ................................................................................................................... 60
V. FOREIGN OEM REVIEWV. FOREIGN OEM REVIEW ............................................................................................................................ 61Foreign OEMs in Russia .................................................................................................................... 61Ford Motor Company ZAO .............................................................................................................. 63General Motors – JSV “GM-AvtoVaz” ............................................................................................ 64Renault - JSC “AVTOFRAMOS” ......................................................................................................... 65Avtotor: KIA, BMW ............................................................................................................................. 66TagAZ: Hyundai, Daewoo, Citroen ................................................................................................ 67
VI. ANNEXESVI. ANNEXES ...................................................................................................................................................... 68Annex 1. International Automotive Suppliers in Russia ............................................................. 68Annex 2. Russian Automotive Component Suppliers Locations in Russia ........................... 70Annex 3. Information Sources On Russia .......................................................................................... 71Annex 4. Sources for the Primary List of Companies ................................................................... 76Annex 5. Questionnaire 1 ...................................................................................................................... 77Annex 6. Questionnaire 2 ...................................................................................................................... 78Annex 7. Prioritizing the Companies ................................................................................................. 79Annex 8. Selection Criteria: Ranking Scores. ................................................................................... 80Annex 9. Selection Criteria: Weights. ................................................................................................. 81Annex 10. List of 54 Companies (Alphabetical Order) ................................................................. 83Annex 11. Protective Tariff s .................................................................................................................. 91Annex 12. Customs Duties on selected automotive parts as of January 28, 2004 ............ 93Annex 13. Russian OEM Vehicles ......................................................................................................... 94Annex 14. Most Popular Foreign Brands in Russia ....................................................................... 97Annex 15. Top Selling Models of Foreign Cars Sold in Russia ................................................... 97Annex 16. Foreign OEM Vehicles ......................................................................................................... 98Annex 17. Decree Of The President Of The Russian FederationNo. 135 of February 5, 1998 “On Additional MeasuresFor Increasing Investments For The DevelopmentOf The Domestic Automobile Industry” ............................................................................................ 99
Table of content 5
IFC Project Summary ........................................................................................................................ 101Project Client Firms ................................................................................................................ 101Project Activities ..................................................................................................................... 102Project Achievements and Results ................................................................................... 103Sponsoring Organizations .................................................................................................. 104International Finance Corporation ................................................................................... 104US Trade and Development Agency ............................................................................... 104
7
Preface
From 2002 to 2004, International Finance Corporation (IFC), implemented the Automo-tive Component Supplier Development Project in Russia. This report was prepared by the Project staff and provides information on selected Russian companies that appear to be good potential partners or customers for foreign business. Given the recent rapid growth of the Russian automotive market, such information is timely.
In preparing this report, IFC sent questionnaires to over 200 Russian automotive com-ponent supplier firms to select those that are investing in improvements in quality. The project staff then collected detailed information on 21 of the top�ranked companies.
IFC is active in financing projects in the Russian automotive sector, as well as in man-aging technical assistance projects in the sector. For additional information, or copies of this report, please contact IFC at the appropriate address below.
IFC wishes to thank Jean�Francois Tremblay of Ernst and Young’s Moscow office for his encouragement and support in this project. Also appreciated was the advice of the IFC Project consultant Prioritet, itself an excellent source of information on Russian automotive component supplier firms.
IFC Points of Contact
Technical Assistance Projects
Carl Watt, Operations ManagerInternational Finance CorporationMoscow, Russia7�095�411�[email protected]
Project Finance
Tatyana Bogatyreva, Investment OfficerInternational Finance CorporationMoscow, Russia7�095�411�[email protected]
8
I. Executive Summary
1. Many Russian Automotive Component Suppliers are Making Quality Improvements to Join the International Industry
The IFC survey of selected Russian automotive component manufacturing firms in-dicates that:
1. Many automotive component manufacturing firms in Russia are investing their own resources in creating international�level quality management systems.
2. Automotive component manufacturing firms may be found in Russia with ISO�9001:2000 certifications already in place and at least one firm has ISO/TS 16949 certification.
3. The improving firms are found throughout Russia with no specific geographi-cal location. This implies that partners can be found in lower�wage regions of Russia.
4. Most improving firms are interested in partnering with international firms for production ventures
In addition to questionnaires sent to over 200 Russian automotive component supplier firms, IFC staff visited many firms for supplemental information. Some of the more attractive firms are profiled in Section 2. Location and contact information for more than 50 firms are also included in this review.
2. International�Level Quality is Possible
Some companies, such as Ford and Tenneco, have entered the Russian market in-dependently with greenfield operations, bringing with them their own world�class quality management systems and training their own local staff. For those exploring the greenfield route, this report provides information on local quality management system consultants which might assist in the cost�effective training of local employ-ees1. Successful world�class quality production by Ford and other companies in the automotive and other sectors demonstrate conclusively that Russian employees can rapidly absorb international quality management systems given proper management and work conditions.
1 See Section 7 in Annex 1.
I. Executive Summary 9
Many other foreign firms will partner with Russian firms for cost�reduction or other reasons2. For these firms the poor appearance of many Russian automotive factories and the low quality of their products can be a major barrier to entering the Russian market with a partner. This IFC study shows that the situation is changing in Russia and that some Russian firms are making progress in adopting international quality management techniques. In early 2004 the Russian authorities published a Russian national automo-tive standard based on the international automotive standard ISO/TS 16949, and the local sourcing efforts of Ford and GM are accelerating its adoption. Even the Russian Original Equipment Manufacturers (OEMs) are now pushing their suppliers to move to ISO/TS 16949 practices. At least one Russian automotive component producer and one joint venture company were reported to be certified to ISO/TS 169493 by early 2004.
Assembly area for the Ford Focus windshield wiper system. AvtoPribor, Vladimir, Russia
2 See Section 4 for a list of foreign automotive suppliers operating in Russia.3 See Sotex in “Company Profiles” (Section 2), and PES/SCC, a JV with Delphi Corporation, USA, in
Samara Cable Company Profile, Section 9.4 Womack, James & Jones, Daniel, Lean Thinking, Simon and Schuster, September 1996. Russian pub-
lisher: www.alpina.ru.
Furthermore, some foreign consulting firms and OEMs are starting to introduce Japa-nese techniques for production quality and efficiency improvement (Toyota Produc-tion System or Lean Production) in the Russian market. The book Lean Thinking4 by Womack appeared in Russian translation in 2003.
However, finding firms that are making real improvements can be time�consuming and expensive. The suppler information in this report provides information on some of those Russian firms that are making efforts to improve their production quality to international levels.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector10
3. Russia Is A Rapidly Growing Automotive Market
The business case for the Russian market is rapidly improving. Like China of several years ago, the Russian automotive market is relatively small, but growing quickly. Analysts predict continuing strong annual sales growth of 5 to 20%. Car sales are estimated at between $11–13 billion in 2003, a 5–10% increase over 20025.
According to Russian Government officials, by 2010 the car market in Russia will reach $18 billion and some analysts predict $20 billion6. At an annual 5% growth rate the market will reach approximately $16–$18 billion by 2010 depending on the data sources used7. Sales growth for foreign manufacturers in Russia is expected to be even higher as they increase their market share. For example, Ford Motor Company increased its sales from 3,600 vehicles in 2002 to 20,712 in 2003. The GM-AvtoVAZ joint venture produced almost 30,000 vehicles in 2003, and plans to increase production to 60,000 vehicles in 2004 (see figure 1) and introduce a second vehicle model.
5 Reported figures for total car sales in Russia vary by source. See ASM Holding ($13 billion), PriceWa-terHouseCoopers ($12.3 billion), SeverStalAvto ($11.2 billion) for 2003.
6 The Government ”Concept of Automotive Industry Development up to 2010”.7 $16 billion: data from www.ladaonline.ru, $18 bilion: data from ASM Holding, www.autonews.ru of
03.12.2004.
60,000 units in 2004
100% increase
30,000 units in 2003
Figure 1“Chevy Niva” production plans of the the GM-AvtoVAZ JV in Russia
Source: GM�AvtoVAZ
I. Executive Summary 11
Sales of the 6 top selling foreign design cars in Russia
Source: Izvestia
Figure 2
4. Foreign Designs and Brands are the Future
Foreign car designs and brands seem to be set for the biggest gains in the coming years. The market share of Russian�designed vehicles seems likely to continue to decrease for several reasons:
1. The Russian OEMs do not appear to have the funding or technical capability to develop an internationally�competitive car;
2. An internationally�competitive car would require components that are not available from the current supply base in Russia and which would have to be imported or developed, thereby eroding local price advantages;
3. Current Russian designs have lower reliablility and performance than their foreign competitors; Russian consumers are clearly unwilling to pay international�level prices for these cars, and,
4. Most Russian OEMs seem to be taking steps to establish production of foreign designs.
Given the high import tariffs for new and used imported cars (see annex 11) and im-proving income levels, the share of domestically manufactured international brands appears is likely to continue its rapid growth. Figure 3 indicates some conservative projections of current trends to 2010. As this document went to press, data for the first
0 5,000 10,000 15,000 20,000 25,000 30,000
Toyota
Ford
Daewoo
Mitsubishi
Hyundai
Kia
Sales in 2002, units
Sales in 2003, units
units
Finding Quality Partners: A Review Of The Russian Automotive Component Sector12
8 Forecast Assumptions:— 5% growth for the total market;— 8 % growth for New Foreign Design Cars;— Forecast for Used Foreign Design Cars based on the prediction of ASM Holding;— Growth for New Russian Design cars is calculated as a residual.
9 Further details are provided in annex 11.
5. Government Policy Supports Domestic Production Ventures
Russian Government industrial policy is geared toward providing incentives for both domestic and foreign investors to produce vehicles and components in Russia. High tariffs on imported new and used cars are the main tool of this policy. The new tariffs and taxes approximately double the price of used imported cars and increase new car prices by about 50%9. As noted above foreign auto makers already in Russia are reacting by increasing production volumes.
Figure 3
half of 2004 indicated that imports of foreign cars continued to increase. even after the imposition of protective tariffs, increasing by 280% to 215,200 units compared to 2003 (see “Vedomosti” of August 10, 2004).
Source: ASM Holding
Russian and Foreign Design Cars Sales in Russia: USD Billion (5% growth rate)8
20
18
16
14
12
10
8
6
4
2
02002 2003 2004 2005 2006 2007 2008 2009 2010
New Foreign Design Cars
Used Foreign Design Cars
Russian Design Cars
USD billion
New Foreign Cars
Used Foreign Cars
Russian Design Cars
13
II. Russian automotive market overview
This section reviews the current situation in the Russian automotive market to supple-ment the company information.
Russia: Macroeconomic Overview
Below are excerpts from the World Bank Russian Economic Report No. 7, of February, 2004. This overview of the Russian economy is provided in support of the Project conten-tion that the Russian economy and automotive market is likely to continue its growth10.
Overall, 2003 was another very good year for Russia’s economy. Growth of more than 7 percent brought the cumulative expansion since the depths of the 1998 crisis to about 38 percent. As expected, rapid growth was a powerful weapon in the fight against poverty and started to reach the poorest members of society as well, causing the official poverty count to fall from 27 percent to 22 percent by September.
The macro�economy was generally well managed, with inflation coming in at the upper end of the targeted range (12 percent), the ruble’s real appreciation against a trade�weighted currency basket continued to 4.1 percent, and a sizeable budget surplus of 1.6 percent of GDP, more than twice the target. There was no sudden and lasting capital flight triggered by the “Yukos affair”. Most impor-tantly, domestic investment rates and capital expenditures have recovered from their previous dismal levels and growth is, albeit cautiously, spreading through sectors and regions.
Fast GDP growth this year ensured rapid real income growth that, in turn, almost immediately translated into a decline in poverty levels. Real disposable income grew by 14.5 percent in 2003, while real wages increased by 10.4 percent. The average nominal wage increased by 26.4 percent to 5,512 Rubles (USD 180) in 2003, compared to 4,360 Rubles (USD 140) in the previous year. The decline in the official poverty level has been profound: according to the official defini-tion, the number of people below the subsistence level fell from 27.3 percent in September of 2002 to 21.9 percent a year later.
10 www.worldbank.org.ru
Finding Quality Partners: A Review Of The Russian Automotive Component Sector14
Russia: Automotive Market
Market size and Federal Government attitude towards investment in the sector are key to international investment decisions. This section provides information on the growth of the automotive market and Russian Government efforts to support the industry.
Russian Government Support To The Automotive Industry
Protective Tariffs
The Russian Federal Government is attempting to stimulate and protect the domestic automotive industry, and import tariffs are the Government’s main tool. Increasing im-port tariffs on new and used cars, trucks and buses, as well as many components, are also aimed at providing incentives for foreign companies to produce inside Russia.
In the Fall of 2003, protective tariffs were extended to cover imported cars over 7 years old. These cars are seen as a key competitor to the low�price Russian OEM new pro-duction. Tariffs on used cars over 7 years old were increased from 2 Euros per cubic centimeter to 2.2 Euros per cubic centimeter. The new tariffs can more than double the price of used imported cars and raise new car prices by approximately 50%. An-nex 11 provides details on the calculation of the tariffs.
The current customs tariff on automotive components varies from 5�20% and duties on selected automotive components are presented in Annex 12. The market for auto-motive components has been showing considerable growth in the last several years. Statistical data on production and sales volumes of specific groups of components can be obtained from one or more of the sources listed in Annex 3, sections 1 and 3.
According to the Russian Minister for Economic Development, German Gref, the government is considering further raising tariffs on imported cars for the next three to five years. One reason for this increase is to attract investment in the automotive industry by providing higher margins for foreign companies producing in Russia. Mr. Gref suggests that increases in import tariffs will not have a negative impact on the country as the cost will be offset by the benefits of increased employment and better quality Russian cars. According to Mr. Gref, after Russia’s eventual ac-cession to the WTO, import tariffs will be lowered over time in accordance with the WTO rules.
Presidential Decree No. 135
Another measure to stimulate foreign investment in the automotive sector was in-troduced by former Russian President Yeltsin and is called “Decree of the President
II. Russian automotive market overview 15
of the Russian Federation no. 135 of February 5, 1998, “On additional measures for increasing investments for the development of the domestic automobile industry”11 According to the Decree No. 135, a foreign car maker assembling vehicles in Russia may import components duty�free in exchange for significant spending on the territory of Russia. Under the decree, the foreign company must spend at least 50% of the value of the production vehicle on the territory of the Russian Federation within 5 years of the start of production. The decree was originally intended to support a venture between the Russian GAZ factory and a unit of FIAT, however the first company to work under this decree has been Ford Motor Company, at its Vsevolozhsk factory, near St. Petersburg. It is important to note that operational expenses other than just component purchases can be counted towards the 50% local content requirement.Perhaps due in part to the perceived difficulty of sourcing in Russia, only GM and Ford have chosen to work under the Decree 135 framework. For example the Renault “Av-toFramos” JV car plant, set to start new assembly operations in 2005, has announced that it will not be making any local sourcing commitments.
Russian Government Automotive White Paper
In July 2002, the Russian Government published a policy white paper titled: “A Con-cept for the Development of the Russian Car Industry”. The “Concept” is for the period up to 2010 and suggests goals, tasks and priorities to improve automotive industry performance in Russia12. The Concept has no force of law.
The major objectives outlined in the Concept document are:• integration of the Russian car industry into the international automotive sec-
tor;• production of vehicles fully compliant with world requirements on environ-
ment and safety;• creation of new production facilities;• development of competition in the market step by step.
Rising Sales and Production Volumes
At present Russian�owned and managed OEMs still account for upwards of 90% of car unit production in Russia, making them significant potential partners and cus-tomers for equipment upgrades and consulting services. However the market share of Russian�designed vehicles seems likely to decrease for several reasons:
• The Russian OEMs do not appear to have the funding or technical capability to develop an internationally�competitive car;
11 Full text of the document is presented in Annex 19.12 According to the Concept document, the Russian car market is to grow to 2.5 Million cars by 2010.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector16
• An internationally�competitive car would require components that are not available from the current supply base in Russia and which would have to be imported, thereby eroding any local price advantages;
• Current models have lower reliablility and performance than their foreign competitors, Russian consumers are clearly unwilling to pay foreign prices for these cars; and,
• Most Russian OEMs appear to be taking steps to establish production of foreign designs.
Given the high import tariffs for new and used imported cars (see Annex 11) and improving income levels, the share of domestically manufactured foreign design cars appears likely to continue its rapid growth. One observation, often noted in today’s Russian auto industry, is the fact that while in 2003 Russian�made cars still had a commanding lead over imports based on unit sales, imports already accounted for the majority of spending on cars in Russia. This is another indication of the Russian consumer’s strong preference for foreign�design cars.
To date, the limited number of Russians able to afford a foreign�design car and the availability of thousands of inexpensive used imports from Europe and Japan, have kept the volume of production of foreign design cars in Russia very low. This situa-tion is likely to change due to:
• Introduction of high tariffs on used and new imports detailed above;• Increasing income levels, noted above;• Availability of car loans, now expanding to the various regions of Russia.
Figure 5 indicates the current segmentation of the Russian market prior to the impact of the new tariff increases. The chart indicates the increasing impact of foreign designs being produced in Russia. This effect will only increase after the major increase in import tariffs of late 2003.
Figure 6 shows GDP and foreign�design car sales in Russia extrapolated to 2010 under two scenarios: conservative (assuming 5% growth rate) and alternative (assuming 10% growth rate), based on one set of market data available in Russia. This data supports the view that 5% annual growth for foreign design car sales in Russia is a conserva-tive estimate.
II. Russian automotive market overview 17
Figure 4
Russian car market structure
GDP and foreign design car sales forecast in Russia through 2010.
Figure 5Source: PricewaterhouseCoopers
Source: World Bank and OECD National Accounts, ASM Holding
100%
80%
60%
40%
20%
0%2002 2003
1% 4% Used foreign carsNew foreign carsLocally produced foreign design carsRussian cars
16
14
12
10
8
6
4
2
0
GDP, USD Billion,(5% growth estimate)
1 2 3 4 5 6 7 8 9
500
450
350
300
250
200
150
100
50
0
Foreign Design Car
Sales, USD billion
Foreign Design Car SalesUSD Billion(5% growth estimate)
Foreign Design Car Sales USD Billion(10% growth estimate)
GDP, USD billion
32% 27%
8%11%
59% 59%
units
18
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia
This section contains an IFC review of Russian companies that appear to be good potential partners or customers for international investors in the Russian automotive components sector, based on company efforts at quality improvement. This infor-mation is intended as a good first step in the search for partners. The information is provided for general use only and should never be relied on for any financial decisions without independent due diligence. The intent of this study is to be of assistance in shortening the time required for partner selection and the required due diligence ac-companying any potential business.
Due Diligence and quality certificates in Russia
Due diligence in any developing country should be even more thorough than in the developed world. One issue is International Organization for Standartization quality management system standards (ISO Standards). The Project staff has observed cases, and heard of many more, where quality standard certificates have been awarded to factories in Russia that in fact do not fully comply with the quality standard. Conversely, there also may be smaller factories that have good quality management systems, but have not been able to afford the high cost of certification. Investors should always independently check on a partner’s quality management system claims.
Review Methodology
IFC first created a ‘long list’ of automotive sector firms compiled from several sources listed in annex 2 of this Review. IFC then prepared, distributed and recorded re-sponses to a questionnaire for these Russian firms (see annex 3�4) which provided data on company quality and business performance. The IFC hypothesis underlying the survey is that one of the best ways to judge a Russian supplier is the supplier’s own efforts in improving its quality management system. While a foreign partner can provide financing and technology support relatively quickly, developing a
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 19
world�class quality management system and mindset takes more time and effort on the Russian side.
IFC staff visited many of the suppliers in the final list to confirm the data provided and gain more information. The company selection method is outlined in the chart below and presented in detail in Annexes 7–9. Table 2 is a list of the companies selected for more detailed study13 . Reports on these companies are presented below.
13 Contact information for each firm from the list is given in Annex 10.
Table 2
LONG LIST SHORT LIST FINAL LIST
300+сompanies
54 сompanies 21 companies
• Not a company in thetractor/bus/truck segment
• Not an International JV• Willing to provide
information for this survey
• Have a Quality Management System certifi cate
• Making investments in quality system
• Operating for more than 3 years
• Have more than 100 employees
• Interested in working with international partners
• Making investments in external quality consultants
• Experiencing growth in production
• Maintaining fi nancial stability
• Supplying to Russian OEMs
# Company Name Component produced
1 Avtoagregat, ОАО Clutch system, suspension system, wheels and hubs, braking system, door locks and ignition system
2 Avtoarmatura, OAO Car antennas, ignition switches and other switches, electrical and plastic components
3 AvtoPribor Factory, OAO Instrument clusters, windshield wiper systems, sensors, other automotive electrical products
4 Avtotechnica, OOO Floor, ceiling, trunk coverings and sound insulation panels
Top 21 companies of the review in alphabetical order*
*Other good companies exist in the automotive sector in Russia and many good companies desire to enter the sector. Some automotive companies may not have been included in the IFC base lists and some companies may have provided incomplete information in response to survey questionnaires.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector20
Main Findings
The first main finding of the review, also based on interaction with the industry, is that the Russian automotive industry has clearly gotten the message about international quality requirements and is taking steps to meet the challenge. Most companies sur-veyed, and even the Russian OEMs, have announced definite plans to move toward compliance with the ISO/TS 16949 international automotive quality management system standard. All of the profiled companies have funded at least some training in quality management improvement through external consultants and most of the top 22 companies have ISO�9001 certifications in place.
5 Detalstroykonstruktsiya (DSK) Fuel tanks, carpeting, window raisers, miscellaneous components
6 Elara, ОАО Ignition systems; climate control systems
7 Energotechmash, ZAO Bumpers, bumper beams, stampings made from thin sheet steel, plastic components
8 Intercos-IV, ZAO Automotive body panel dies, other tooling for large- sized stamping, Automotive and other stamping
9 Kaluga Plant of Automotive Electrical Equipment (KPAE), ОАО
Electrical equipment
10 Kursk bearing company, ZAO Bearings, engine main bearings
11 Orleks, ZАО Thermostats
12 Osvar, OAO Automotive lighting; internal lights, headlights, braking lights
13 Polimerstroimaterialy, OAO Trunk rugs, fl oor mats
14 Samara Cable Company, ZAO Cables, car wiring
15 Samaraavtozhgut, OOO Auto wiring assemblies, windshield washer systems, door lock wiring
16 Soate, ZАО Automotive electronics, injection systems, ignition systems
17 Soteks, ZAO, NP Polyurethane foam and plastic parts
18 Toplivnye Systemy, OOO Fuel injection system elements, cooling systems pumps, electromagnetic valves, gasoline pumps, carburetors
19 Trek, ZAO Constant velocity Joints (CV Joints), tie rods, springs, and shock absorbers
20 Zavolzhsky Engine Factory (ZMZ), ОАО Diesel and gasoline engines, engine main bearings
21 ZEiM-Line, OAO Controllers for fuel injected engines, vehicle antitheft systems and diagnostic equipment for electronic systems
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 21
Second, the review finds that improving firms are located in several regions of Euro-pean Russia, and are not concentrated near the higher�wage large cities of Moscow and St. Petersburg. Foreign firms that limit their searches for partners geographically may be missing potential opportunities. Travel to the regions of Russia has become significantly more comfortable in recent years and no longer poses a barrier to doing business in the majority of locations.
Finally, all of the firms surveyed recognize that foreign partners are key to their long�term success and are ready to consider almost any proposal for cooperation with a foreign company. It is important to note that many successful partnership production operations begin with a focused effort to create a separate, limited�size, international�class production area at an existing factory. Such an effort can limit investment risks, produce faster results and can be used as a training tool to expand the quality system improvements to other products. Often these special production areas can be set up as separate legal entities.
Toyota Production System (Lean Production) in Russia
Because the ISO/TS 16949 international automotive quality system standard does not specifically refer to Toyota Production System (Lean Production) techniques, the introduction of these quality and efficiency improvement tools has been slower than other tools like FMEA (Failure Modes Effects Analysis), which are more clearly required in the standard. Several factors are changing this situation for the better. First, the RusPromAvto group has hired the YOMO consulting firm to work with its GAZ factory in Lean Production improvements. GAZ has reported in the press on its dramatic improvements based on this effort. In response, RusPromAvto has been moving trained Lean Production specialists to its other factories. Also, the firm has been very active in bringing its suppliers to the GAZ factory to learn about the new methods. Other international Lean Production consultants appear to be entering the market and some Russian consulting firms are attempting to develop expertise in lean production techniques.
At the same time, Ford and GM have had foreign quality specialists in Russia since 2002 communicating their desires for Lean Production to their Russian suppliers. Ford in particular has operated three localization offices in Russia for work with sup-pliers. Ford and GM also regularly bring suppliers to see their assembly operations in Russia, which adds to the impact. For example, after visits to Ford’s Vsevolozhsk factory, the ZMZ engine factory has begun strong efforts to copy the Ford methods for quality assurance and improvement in final assembly. In addition, the require-ments of the foreign OEMs are being studied very intensely and copied as much as possible by the Russian OEMs. In 2003, the book Lean Thinking by Womack was
Finding Quality Partners: A Review Of The Russian Automotive Component Sector22
published in Russian . Geared toward management, this book had a great impact in the US and may have a similar impact in Russia. A Russian market for Lean Produc-tion consulting services is likely to develop along with demand for new equipment and components.
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 23
COMPANY PROFILES
An IFC representative visited selected companies from the Project list of top compa-nies and profiles of those companies are listed in this section. The location of these companies is shown on the map in Annex 2. Annual sales numbers are listed for those companies that provided this information to IFC.
1 AV TOAGREGAT
Contact information:General Director: Valeri Ardalyonovitch Smyshlyaev Quality Director: Vyacheslav Anatolyevitch Smirnov Address: 1, 2nd Shuiskaya st., Kineshma, Ivanovo region, 155800, Russia Tel: +7 (09331) 2-35-40; Fax: +7 (09331) 2-07-65 Website: http://www.kineshma.ru
AvtoAgregat is located in Kineshma, on the Volga River, 400 kilometers east of Mos-cow. The factory employs more than 500 workers. It was originally founded in 1967 and was privatised in 199214.
The company is notable for its quality improvement efforts. At present AvtoAgregat has one shop making brake system components for export. This shop has a certifica-tion to the US QS-9000 automotive standard with very low defect rates, and exports production to TRW.
Ownership: PrivateQuality system certification: QS-9000 certification awarded by TUV in 2000 for a production area producing for TRW.Major customers: VAZ, UAZ, LuAZ, KamAZ, PAZ, TRW
� Main products: clutch systems, sus-pension systems, wheels and hubs, braking systems, door locks and igni-tion systems
14 Currently the factory is reported to be part of the Russian Automotive Components firm. See www.rac.ru
Finding Quality Partners: A Review Of The Russian Automotive Component Sector24
2. AV TOARMATURA, OAO
Contact information: General director: Alexander Mihailovich Tkachenko Deputy general director: Alexander Evgenevich Dudarev Address: 21, Salova str., 192102, Saint-Petersburg, Russia Tel.: +7 (812) 112-88-73E-mail: [email protected]
Avtoarmatura is located in Saint-Petersburg, the second largest city in Russia. The company was established in 1946 and privatized in 1993. The company employs 912 people. Avtoarmatura produces automotive electrical devices including: anten-nas, switches, circuit breakers, push-button switches, ignition switches, instrument lights and ceiling lamps. Its products go to almost all auto manufacturers in Russia. Avtoarmatura has a joint operation with Delphi Corporation under which Delphi supplies equipment and components, and Avtoarmatura assembles and supplies the final product (steering column and keypad switches) to local and foreign auto manu-facturers in Russia15.
Avtoarmatura is very interested in expanding its international partnerships. Ford mo-tor company and Avtoarmatura have signed a contract for supply of component parts to the Ford Factory at Vsevolozhsk, a suburb of Saint-Petersburg. Avtoarmatura will supply the Vsevolozhsk plant with antennas.
Ownership: PrivateQuality system certification: ISO 9001:2000.Major customers: GAZ, VAZ, KamAZ, ZIL, UAZ, IzhAvto, MAZ and KrAZ.
� Main products: car antennas, ignition switches and other switches, other electrical and plastic components
15 Source: US Department of Commerce, BISNIS; Search for Partnershttp://www.bisnis.doc.gov/bisnis/lead.cfm?1257.
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 25
3. AV TOPRIBOR FAC TORY
Contact information: General Director: Aleksey Aleksandrovich MelnikovQuality Director: Eduard Georgievich RaiterAddress: 79, Bolshaya Nizhegorodskaya St., 600016, Vladimir, Russia Tel: +7 (0922) 32-45-12; 29-72-94; Fax: +7 (0922) 21-52-37Website: www.avtopribor.ruE-mail: [email protected]
OAO AvtoPribor is located in Vladimir, one of the “Golden Ring” cities, located about 200 kilometers east of Moscow, with a population of approximately 350,000. AvtoPribor was founded in 1932 to supply automotive gauges and other items to the then-new GAZ factory. Today AvtoPribor, like most former-Soviet factories, supplies a wide range of products from automotive instrument clusters, to windshield wiper systems. The factory has about 8,000 employees.
AvtoPribor is certified to ISO 9001:2000 and is working on implementing ISO/TS 16949 practices. During 2002-2003 the factory went through the APQP process with Ford Motor Company, ZAO, of Russia for supply of a windshield wiper system to Ford’s Vsevolozhsk, Russia, Factory. During this period IFC provided assistance to AvtoPribor in the improvement of the factory quality management system. In early 2004, AvtoPribor signed a supply agreement with Ford.
Ownership: PrivateQuality system certification: ISO 9001:2000, current certificate.Major customers: All major Russian OEMs. Strategic goal to supply to foreign OEMs. AvtoPribor has supply contracts with Ford Motor Company and some foreign automotive supplier firms.
� Main products: Instrument clus-ters, windshield wiper systems, sensors, other automotive electri-cal products
� Sales: USD 68 Million in 2003
Finding Quality Partners: A Review Of The Russian Automotive Component Sector26
4. AV TOTECHNIC A, OOO
Contact information: General Director: Sergey Mihailovich Konovalov Address: 6, Travyanaya St., Nizhny Novgorod, 603037, RussiaTel: +7 (8312) 23-12-43; Fax: +7 (8312) 23-12-98
AvtoTechnica is located in Nizhny Novgorod, an industrial city on the Volga River about 500km east of Moscow, with a population of about 1.3 million. Nizhny Novgorod is also the location of the large Gorky Automotive Factory (GAZ) car and truck OEM. AvtoTechnica is a 4-year old private company, supplying automotive floor, ceiling, and trunk coverings and sound insulation panels to Russian Automotive OEMs. The company employs about 120 people.
Ford has offered AvtoTechnica an opportunity to produce the interior rugs and sound insulation for the Focus car. In 2003 the IFC Automotive Components Supplier De-velopment Project worked with AvtoTechnica to support its efforts to implement ISO-9001 practices.
Quality system certification: ISO-9001:2000 and ISO/TS 16949:2002 in process
� Main Products: Floors, ceilings, trunk coverings and sound insulation panels
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 27
5. DE TALSTROYKONSTRUK TSIYA DSK
Contact information:General Director: Aleksey Ivanovich Zverev Technical Director: Vladimir Petrovich Maslennikov Address: Industrial Park on AvtoVAZ territory,Togliatti, Samara region, 445026, RussiaTel: +7 (8482) 73-94-20; +7 (8482) 73-87-49
The production firm “Detalstroykonstruktsiya” (design and building of machine com-ponents and structures or “DSK”) is situated in the city of Togliatti, the Samara Region. The city of Togliatti is also the site of the huge AvtoVAZ factory complex. Togliatti is almost 1000 km from Moscow and 100 km from Samara, located on the Volga River. Togliatti’s population is 730,000.
DSK was created by AvtoVAZ in 1994 to produce miscellaneous components trans-ferred from AvtoVAZ production shops and using production equipment transferred from AvtoVAZ. The company currently manufactures several hundred different items for AvtoVAZ, but the main production is interior carpeting and fuel tanks. DSK has 1,648 employees and works on a build to print basis without its own product devel-opment. The factory’s main customer is AvtoVAZ, but some products are supplied to GM-AvtoVAZ and to Ford in Russia. The company has seven English-speaking employees. There are two interpreter/translators on staff.
Ownership: Private.Quality system certification: ISO 9001:2000 certificate.Major suppliers: Balakovorezinotekhnika (rubber goods), Balakovo city; Borsky glass-works, Bor; Saratovsteklo (Glass production in Saratov city); Plastic, Uzlovaya Nomatex, Novaya Maina; Utyos, Ulianovsk; SEPO-ZEM, Saratov; Signal, Engels; Debours, Kazan; Shatkovsky Plant of Industrial Standards, Shatki.Major customers: AvtoVAZ, GM-AvtoVAZ, Ford Motor Company, Vazinterservis, IzhAvto, SeAZ, ZMA, RosLada.
� Main products: fuel tanks, carpeting, window raisers, miscellaneous com-ponents
� Sales: USD 110 Million in 2003
Finding Quality Partners: A Review Of The Russian Automotive Component Sector28
6. ELARA
Contact information: General Director: Gleb Andreevich Ilienko Director of Automotive Electronics: Anatoly Nikolaevich Danilov Address: 40, Moscovsky ave., 428015 Cheboksary Chuvashia, RussiaTel: +7 (8352) 49-10-05 Website: www.elara.ru; E-mail: [email protected]
Elara is located in the city of Cheboksary, capital of the Chuvash Republic of the Rus-sian Federation. Cheboksary is located in 770 km from Moscow, on the banks of the Volga River, between Nizhny Novgorod and Kazan. Cheboksary is an industrial city with a population of approximately 460,000. Since the end of the Soviet Union, the Chuvash Repblic has remained a peaceful, integral part of the Russian Federation with a positive attitude towards business and investment.
The factory, originally called the Cheboksary Instrument Building Plant, was opened in 1970, specializing in build to print of complex aircraft electronics equipment. In 1993 the plant was transformed into OAO (Open Joint Stock Company) “Cheboksary Instrument Building Plant “Elara”. Since the reorganization of 1993, the company has been working to diversify from its original reliance on defense and aerospace contracts. With the collapse of Russian defense spending in the 1990s, Elara was one of the few defense enterprises to react decisively with painful layoffs. This allowed the firm to have the necessary cash flow to make investments in diversification. Elara has over 5,000 employees, down consider-ably from Soviet times. Of that number, about 600 are directly involved in automotive production. Elara reports stable high growth in production.
The company has continued to invest in its core electronics business, in particular in production equipment for printed circuit board production, and to use its core compe-tencies to expand into new sectors. The main diversification effort at Elara is into the automotive sector. The company now manufactures about 40 automotive electronics products, accounting for about 10 percent of the company’s total production. Elara is reported to be a subcontractor to the Siemens VDO joint venture with the Chistopol Precision Instruments Factory for automotive instrument cluster production. Of the company’s 150 design engineers, 70 percent work on the development of automotive components. Elara reports that the automotive business is growing at a rate of about 150% per year and management is considering the possibility of spinning off the au-tomotive business as an independent company in the future.
� Main Products: Ignition systems; climate control systems; signal and control systems
� Sales: USD 10 Million in 2003
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 29
Elara’s current certificate to ISO 9001:1994 was issued in May 2002 by TUV Thuringen. A certification to ISO 9001:2000 is planned. At present, the Company is introducing elements of the ISO/TS 16949 quality system and funding some work with external quality consultants. The Company has implemented a system from OCE (Netherlands) for digital document control.
Elara uses an MRP-2 BAAN system and Pro/Engineer CAD/CAM/CAE software. Ac-cording to Elara, the company has invested more than 2 million dollars in its applica-tion software. Further investments are planned in the future. Elara reports that since 1993 it has invested over 60 million dollars in new equipment, including 27 million dollars in its automotive business.
Most of the senior managers have been working in the Company for over 10 years and the General Director, Gleb Ilyenko, has run the company since it was first founded in 1970. Mr. Ilyenko has taken business management courses in the USA and is anxious to gain new foreign production partners. The company has purchased a US-made Cessna light plane for transportation of visitors to and from Moscow and other locations.
Ownership: Private (51%), Russian Government (49%) Quality system certification: ISO 9001:1994 certificate was issued in May 2002 by TUV Thurin-gen. The Company is currently introducing QS-9000 and ISO 9001:2000, ISO/GOST 16949, and ISO 14000 quality assurance and control systems. Elara is starting personnel training in accordance with these plans. Since this is a defense firm, special arrangements must be made to visit some production areas.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector30
7. ENERGOTEKHMASH
Contact Information:General director: Sergey Nickolaevich OgrinAddress: 40, Morkvashinskaya Str., Zhigulevsk,the Samara Region, 445350, Russia Tel: +7 (8482) 45-39-75
OAO Energotekhmash is located in the town of Zhigulevsk, Samara Region, Russia, not far from the giant AvtoVAZ automobile factory. Zhigulevsk has a population of approximately 50,000. The company was founded in 1953 to supply metal components to hydroelectric and later nuclear power plants. With the collapse of the Soviet Union, the company was privatized in 1993 and began to diversify into automotive compo-nents production for the nearby AvtoVAZ factory. At present 75% of the company’s production is automotive. 80 percent of the shares in the Company belong to a single shareholder. Energotechmash currently employs approximately 1200 and has a “best supplier” rating from AvtoVAZ.
Energotechmash produces bumpers for almost all models at AvtoVAZ. Other products include bumper beams, trunk reinforcements, thin-steel and aluminum stampings, and some plastic parts. These products are produced on a build-to-print basis and the company can work with CAD documents. Planned investments in new capital equipment are reported to be 5 million euros.
Ownership: PrivateQuality system certification: GOST R ISO 9001-96 issued on December 20, 2002 by the Samara Center of Standardization, Metrology and Certification Certificate No. 18130/034 for the right to supply auto components to AO AvtoVAZ issued in 2001.Major suppliers: Krasnoyarsk Aluminum Plant, Steel from Severstal and Magnitogorsk Major customers: AvtoVAZ – 65%; Avtoagregat –13%; Vazinterservis – 6%; DSK – 6%; After market – 10%.
� Main products: Bumpers, bumper beams, stampings made from thin sheet steel, plastic components
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 31
8. INTERCOSIV
Contact information: Managing Director: Timur Borisovich Shoshtaev - [email protected] Director: Alexey Ivanov - [email protected]: 25 A, Bolshoy Pr. P.S, Saint-Petersburg, 197198 Tel: +7 (812) 232-14-76; Fax: +7 (812) 232-46-79Website: www.intercos-iv.ru
Intercos-IV was established in 1991 by four individuals for the design and manufactur-ing of large-sized tooling for the automotive industry. It is located in Saint-Petersburg, the second largest city in Russia. Intercos-IV products include CAD design and machin-ing of large die stamps for automotive bodies. A recent new investor in the factory is the European Bank for Reconstruction and Development. Intercos customers include global automotive OEMs such as Volkswagen and Ford.
In 2003 the IFC Automotive Component Supplier Development Project worked with Intercos–IV in support of its work to supply the Ford Motor Company factory at Vsevolozhsk, a suburb of Saint-Petersburg. Intercos-IV signed a contract to supply body components to Ford in late 2003. Currently Intercos-IV employs approximately 170 people at two sites in Saint-Petersburg and has a capable design staff.
Ownership: PrivateQuality system certification: ISO-9001:2000 and ISO/TS 16949:2002 in progressMajor customers: Volkswagen, Ford, Daewoo Motor, Hayes Lemmerz, Caterpillar
� Main products: Automotive body panel dies, other tooling for large- sized stamping, stampings for auto-motive and other industries
Finding Quality Partners: A Review Of The Russian Automotive Component Sector32
9. K ALUGA PLANT OF AUTOMOTIVE ELEC TRICAL EQUIPMENT KPAE
Contact information:General Director: Anatoly Naumovich FaerovichAddress: 18, Azarovskaya Str., Kaluga, 248631, Russia Tel: +7 (0842) 55-43-18
ОАО (Public Corporation) “Kaluzhsky Plant of Automotive Electric Equipment” (KPAE) is situated in the city of Kaluga about 200 km north of Moscow, with a city population of approximately 350,000.
KPAE was founded in 1941, just before the war, and was privatized in 1992. 50% of the company stock is owned by 10 major owners. Main customers are AvtoVAZ and RusPromAvto’s GAZ factory. 95% of production is automotive and includes fan and windshield wiper motors, motor gearing, windshield washers and various breakers. KPAE employs over 4,000.
KPAE is certified to the Russian standard – R ISO 9001: 2001. Currently the company is working to introduce elements of the Russian GOST 16949 version of ISO/TS 16949. The firm hopes to get to the 16949 level by the end of 2004.
The company reports a capital equipment investment plan but did not disclose any details. KPAE has an independent product development group with about 15 engi-neers.
Ownership: PrivateQuality system certification: certificate to GOST R ISO 9001:2001, December. Elements of GOST 16949 are currently being introduced at the company. Major suppliers: NLMK, Severstal, Stary Oskol.Major customers: AvtoVAZ – 50%; GAZ – 20%; KAMAZ, UAZ, ZIL, LIAZ, IZHMASH – 30%.
� Main Products: Electrical equip-ment
� Sales: USD 40 Million, in 2003
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 33
10. KURSK BEARINGS COMPANY KBC
Contact information: General director: Leonid Eduardovich RogalevichAddress: 23-а, 3rd Agregatnaya Street, Kursk, 305022, Russia Tel: +7 (07122) 60-2-66
The Kursk Bearing Company (KBC), ZAO (Private Corporation) is located in the city of Kursk, Russia. Kursk is an industrial city about 540 km southeast of Moscow with a population of about 450,000.
The factory was founded in 1972 and in 2002 came under the ownership of the Avto-Prom Trading Group and Unidell Group as a ZAO or private stock company. AvtoProm is a nation-wide distributor of bearings products.
KBC is the 5th largest producer of engine bearings in Russia by volume, producing approximately 1.5 million bearings per month. Total employment is approximately 3,250 and KBC has its own product development engineers.
In November, 2003, KBC certified to the Russian GOST Р ISO 9001:2000 quality man-agement standard. Management has set a goal of certifying to the Russian version of ISO/TS 16949 and ISO 14000 in the future. Training programs have been started. KBC has a “best supplier” rating from AvtoVAZ.
Company management believes that investment in new plant equipment is key for remain-ing competitive in the market. A three-year modernization plan has been prepared.
Ownership: private, main owners are the “Unidell Group”16 and the “Avtoprom” Trading Group17.Quality system certification: Russian GOST ISO 9001:2000 certification in November of 2003. Training has been started for Russian ISO/GOST 16949 and ISO 14000 standards.Major suppliers: Stary Oskol Metal PlantMajor customers: 10% –AvtoVaz; 5% – GAZ; 25% – KamAZ, UAZ, ZMZ, YaMZ; 10% – ex-ports; 50% – machine tool and consumer OEMs.
� Main Product: Engine bearings
16 “Unidell Group” — financial and industrial group. Diversified in industry, agriculture and oil and gas. Contact -information. General director: Sergey Demyanov; Tel.: +7 (095) 788-60-35, Fax: +7 (095) 788-60-40; 16/6 Spartakovskaya square, Moscow, 107082, Russia, e-mail: [email protected].
17 Avtoprom: General director: Sergey Vladimirovich Kolesnikov; Tel./fax.: +7 (095) 933-39-77; 17a, Bldg 1, 2 Mashinostroeniya St., 115088, Moscow, Russia; www.tdap.ru; E-mail: [email protected]
Finding Quality Partners: A Review Of The Russian Automotive Component Sector34
11. ORLEKS
Contact information:General director: Nikolay Nikolaevich Kostin Deputy Head of Marketing and Sales: Vladimir Ivanovich PrilipovAddress: 6, Lomonosova Str., Oryol, 302000, RussiaTel: +7 (0862) 41-01-30; 43-22-34
ZAO Orleks is located in the industrial city of Oryol, about 380 kilometers west of Mos-cow, with a population of about 890,000 inhabitants. The Orleks factory was founded in 1958 was privatized in 1992 with many of the shares owned by employees. The General Director and his son, the First Deputy General Director/ Financial Director, reportedly control about 29% of the shares. The company has about 3800 employees.
Orleks is a significant supplier of control devices to many sectors in Russia with over 100 types of products and over 160,000 versions in production. These products in-clude temperature and pressure relays, manometric-type pressure difference relays, electronic sensors and temperature control units, pressure converters, and electronic control units, manufactured in large runs or made to order for small quantities. Most of the production goes to the manufacture of consumer and retail goods such as refrig-erators, stoves, and air conditioners. Temperature sensors (thermostats) and pressure sensors for the automotive industry make up less than 10% of production.
Management reports that Orleks has been certified to earlier ISO 9001 versions since 1993. At present the company appears to be working on obtaining certification to ISO 9001:2000.
Ownership: PrivateQuality system certification: ISO 9001 since 1993. Currently working on ISO 9001:2000.Major suppliers: ZAO ZMTs-Prommash, Moscow; FGUP Moscow Plant for Processing of Special Alloys, Moscow; GerlingHoltz, Germany; Offenwagner, Germany; ZAO Tekhnopol,Moscow; S-plast, Moscow; Mueller, Germany; IMFI Eugene Precision, France.
� Main products: Thermostats� Sales: USD 12 Million for the first
9 months of 2003
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 35
12. OSVAR
Contact information:General director: Vladimir Elpidiforovich SazhinQuality Director: Vladimir SemyonovAddress: 13, Zheleznodorozhnaya St., Vyazniki, 601446, Vladimir Region Tel: +7 (09233) 23-1-95Website: www.osvar.ru
OAO Osvar is located in the town of Vyazniki, Vladimir Region, Russia. The town of Vyazniki is located in central Russia about 300 km to the east of Moscow, between Vladimir and Nizhny Novgorod.
Osvar was founded in 1967 as a tractor lighting supplier to the planned AvtoVAZ factory in Togliatti. In 1977 Osvar became the first Soviet enterprise to mass-produce halogen head-lights. By the 1980s Osvar was the leading automotive lighting firm in Russia and today produces more than 500 products for domestic and export production. The firm was priva-tized in 1992 and became part of the SOK18 group in 1999. In 2003 the SOK group acquired an Italian lighting producer and it is possible that some designs from this new firm will be produced at Osvar. Foreign companies interested in working with Osvar would be advised to start at the SOK group level. Osvar employs approximately 4,000 and total factory area is 109,000 m2. Investments in machine tool improvement and upgrade will likely be necessary at Osvar, the firm reports that 42% of its machines are 20-30 years old.
In 2002 the company was awarded a TUV certificate to ISO 9001: 2000. Work on an ISO/TS 16949 certification was started in October, 2002. In 2003 Osvar was working with Ford Motor Company to qualify to supply to the Ford factory in Russia.
Ownership: private, member of the SOK group of companiesQuality system certification: July 2002 ISO 9001: 2000 certificate. Work is ongoing in the company to prepare for certification of the compliance of the quality management system to the requirements of ISO/TS 16949.Major suppliers: Bayer, Germany; Plastik, Uzlovaya; Plastmassy, Moscow; Magnitogorsk Met-allurgical Combine, Magnitogorsk; NPMK, Lipetsk; Severstal, Cherepovets; Bilite, Moscow; UELZ, Ufa; Lisma, Saransk.Major customers: GAZ, AvtoVAZ, UAZ, Roslada, PAZ, KamAZ, ZMA, UralAZ, SeAZ.
� Main products: Automotive lighting; internal lights, headlights, braking lights.
18 See www.sok.ru
Finding Quality Partners: A Review Of The Russian Automotive Component Sector36
19 Closed Joint Stock Company “Polad” (ZAO “Polad”) was founded in 1991 as a producers’ cooperative manufacturing automotive components, mainly for AvtoVAZ. Contact information: 105 Yuzhnoye Shosse, Togliatti, 445994, Samarskaya Region, Russia; Tel: +7 (8482) 70-15-00; www.polad.ru; E-mail: [email protected].
13. POLIMERSTROIMATERIALY
Contact information:General director: Vladimir Ivanovich KisilenkoAddress: Promzona, Otradny; Samara Region, 446300, Russia Tel: +7 (84661) 23-0-15
OAO Polimerstroimaterialy is located in the city of Otradny, Samara Region, Russia with a population of 50,000. This location is not far from the AvtoVAZ factory in Togliatti. The factory was founded in 1973 and privatized as part of the Polad group19 in 1998.
Polimerstroimaterialy has supplied plastics to AvtoVAZ since 1975 and has been working with Dow Automotive AG since 2000 in the area of adhesives. Almost 90% of the 365 products of Polimerstroimaterialy are for the automotive industry and the firm employs 700. Other products include linoleum.
The company certified to ISO 9001: 1994 in 2000 through TUV Thuringen and is now working on ISO 9001: 2000 certification.
Ownership: private, a member of Polad group of companies.Quality system certification: The current certificate to ISO 9001:1994 was issued in November 2000 by TUV Thuringen. Undergoing certification according to ISO 9001: 2000, as of late 2003.Major suppliers: Dow Automotive AG components, Germany, Volgogradorgsintez; Volgogra-dorgsintez; RusLine, Gubkin, Belgorod region. Major customers: AvtoVAZ - 70% (includes items for the GM-AvtoVAZ JV), GAZ – 20%; PAZ – 10%.Delivery of products is controlled by Polad.
� Main products: trunk carpets� Sales: USD 2.8 Million in 2003
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 37
14. SAMARA CABLE COMPANY
Contact informaiton: General Director: Valery Fedorovich KluchnikovDirector for Development: Vyacheslav Rodionov Address: 9, Kabelnaya St., Samara, 443022, Russia Tel: +7 (8462) 28-22-40
ZAO Samarskaya Kabelnaya Kompania (Samara Cable Company) is located in the city of Samara on the Volga River, 1100 kilometers southeast of Moscow. Samara is an industrial city with a population of approximately 1.1 million.
The factory was founded in 1955 and organized into a private, closed joint stock company in 1996. It is Russia’s largest manufacturer of cables for the communications industry and automotive components account for about 10% of total production. The company employs over 2,300. Samara Cable has an ISO 9001:2000 standard certificate issued by KEMA (Holland). The company holds internal training for improvement of the quality management system and seventeen company engineers have been trained as managers of quality assurance.
In 1995 the company created a Joint Venture with Delphi Corporation, USA, called PES/SCC20, producing automotive wiring, including thin film wires for electronic fuel injection. PES/SCC is the leading supplier of wiring harnesses to AvtoVAZ. On August 22, 2003 the JV successfully passed ISO/TS 16949 certification and is now working on ISO 14001 “Environmental Management System” certification.
Ownership: Private Quality system certification: certificate ISO 9001:2000 issued in November 1999 by KEMA Quality B.V.Major supliers: Raskan, Neftegorsk, Samara region; Elkat, Moscow; Katurinvest, Yekaterinburg; Pyshma, Yekaterinburg; 80% of Plasticizers from Germany Major customers: AvtoVAZ – 35%; PES/SKK – 35%; GAZ – 20%; Other – 10%.
� Main products: cables, car wiring� Sales: USD 40 Million in 2003
20 JSC «PES/SCC»: Packard Electric System/Samara Cable Company. Contact information: Managing Director: Hartmut Hengstwerth; Address: 9, Kabelnaya St., Samara, 443022, Russia; Tel: +7 (8462) 76-97-70, 76-97-71, 76-97-72, 76-97-73; Fax: +7 (8462) 55-22-09.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector38
15. SAMARAAV TOZHGUT
Contact information: General Director: Alexander Konstantinovich DorofeevTechnical Director: Vladimir KireevAddress: 11, Dzerzhinskogo St., Samara, 443093, Russia Tel: +7 (8462) 66-90-07Website: www.vos.org.ru
OOO Samaraavtozhgut is a state-owned company under the Government’s All-Russia Society for the Blind (ARSB – www.vos.org.ru), and is located in the city of Samara on the Volga River, 1100 kilometers southeast of Moscow, with a population of 1.1 million. Samaraavtozhgut was founded in 1998 by the merger of several ARSB factories.
The firm supplies automotive wiring assemblies to ZIL (Moscow - trucks) and AvtoVAZ vehicles. In addition it carries out assembly of AvtoVAZ components for windshield washer systems; door handles and fuel filter assemblies. The company works on a build to print basis with no product development. It employs about 770 persons, most of whom have vision or hearing disabilities. Management reports that the company is in the process of certifying to the ISO 9001 standard.
Through the support of the European Community’s TACIS program, the company has purchased imported machine tools and approximately 70% of the factory equipment is less than 5 years old.
Ownership: State-owned: All-Russia Society for the Blind.Quality system certification: According to the company management, the company underwent certification in accordance with ISO 9001: 2000. However, the respective certificate has not yet been received by the company.Major suppliers: Samara Cable Company — wires (up to 70% of all deliveries). Major customers: AvtoVAZ – 75%; ZIL - 12%; LiAZ – 12%; Other –1%.
� Main products: Auto wiring assem-blies, windshield washer systems, door lock wiring
� Sales: USD 7 Million in 2003
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 39
16. SOATE
Contact information: General Director: Anatoly Mihailovich Mamonov Quality Director: Yelena LogunovaAddress: 54, Vatutina St., Stary Oskol, Belgorod region, 309530, Russia Tel: +7 (0725) 29-6-40Website: www.soate.ru
ZAO Soate is located in the city of Stary Oskol, Belgorod Region, which located ap-proximately 650 kilometers west of Moscow, with a population of 212,000. Soate was organized in 1991 as a ZAO (closed joint stock company), on the basis of a Soviet factory dating from 1959 and specializing in automotive ignition systems.
Soate has about 4,000 employees, most of whom are involved in automotive produc-tion. At present, the company produces over 150 different types of products, including products for fuel injection, breakerless and breaker ignition systems, electromagnets, electromagnetic valves, car cigarette lighters and various switches. 20% of sales are from the company’s meat processing factory and consumer goods. Company customers include almost all the major Russian automotive OEMs with 55 percent of automotive sales to OEMs and the remainder to the aftermarket. Soate reports that it independently develops all its products for the automotive industry with over 70 engineers involved in product development and industrial engineering.
In addition to many modern CNC machines, the company has an electro-plating shop with a capacity of over 1 million square meters per year. There are no employees in the company who speak English. An interpreter/translator is employed on a temporary basis whenever required.
Ownership: private Quality system certification: ISO 9001:1994 Certificate issued in December 2001 by TUV Thuringen. Plans for certification to ISO 9001:2000 in January 2004.Major Suppliers: NPMK, Novolipetsk; OMZ, Stary Oskol; Vologda Bearing Plant, Vologda; Kursk Bearing Company, Kursk; Samara Bearing Plant, Samara; Magnets, Vladimir and Kineshma; Mikroskhemy, Moscow, Russia. Distribution Center — Stary Oskol, Belgorod RegionMajor customers: GAZ, AvtoVAZ, UAZ, ZIL, Moskvich, IzhMash, KamAZ, MAZ, BelAZ, MTZ, ZMZ, Volga Motors, PAZ.
� Main products: Automotive electron-ics; injection systems, and ignition systems;
� Sales: USD 40 Million in 2003
Finding Quality Partners: A Review Of The Russian Automotive Component Sector40
17. SOTEKS, ZAO, NP
Contact informationGeneral Director: Valery Adolfovich Batmanov Head of the Automotive Division: Lev Gennadievich Alekseev Address: 5, Shuvalovsky Proezd, Nizhny Novgorod, 603095, RussiaTel: +7 (8312) 98-04-08; Fax: +7 (8312) 98-04-37Website: www.soteks.nnov.ru
Soteks ZAO (closed joint stock company) is located in Nizhny Novgorod, an industrial city on the Volga River about 500km east of Moscow, with a population of about 1.3 million. Nizhny Novgorod is also the location of the large Gorky Automotive Factory (GAZ) car and truck OEM. Soteks was founded in 1992 and produces polyurethane foam and plastic parts for the automotive industry. The company employs approximately 200, including a product development staff, some of whom were trained outside of Russia
What sets Soteks apart from almost all Russian-owned automotive suppliers is the firm’s ISO/TS 16949 certification, awarded in 2002. The IFC project staff is not aware of another Russian-owned firm in Russia with this certification. The certification is valid for production and sale of polyurethane foam and plastic parts, as well as the development and assembly of automotive seats. This quality level has attracted business not only from all of the major Russian OEMs, but also from Ford Motor Company’s fac-tory in Vsevolozhsk, Russia. Soteks continues to fund work with external consultants to ensure continuing improvement of the quality management system.
One reason for the Soteks success in quality is its partnership with the German com-pany Vogelsitze GmbH. Soteks is interested in working with other foreign partners as well. The project with Vogelsitze is for the production of seats for minivans and buses. New production facilities are being built to house new production equipment for this project. Training for Soteks employees is being handled by the German part-ner. Another production line for integral foam part production (head rests, armrests, grab handles, steering wheels etc.) was opened in December 2002.
Soteks develops its own formulas for flexible foam part production in its in-house laboratory and mixing stations. Foreign consultants are occasionally used to assist the team of chemists. The company has been reporting a steady growth of sales and profit for the last three years.
� Main products: polyurethane foam and plastic parts
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 41
Ownership: PrivateQuality system certification: ISO/TS 16949:1999 (issued on 17.12.2002, valid through 14.12.2004); ISO 9001:2000 (issued on 17.12.2002, valid through 12.2005)Major Suppliers: “Sarov Avtoservis” ZAO, “Blockform” ZAO, “Sintez” OAO, “Nizhnekams-neftehim” OAO, “Bayer” (Germany), “Dow Chemical” (USA), Akmos (Switzerland), “Gorapur” (Germany).Major Customers: GAZ, Lear OOO (Nizhny Novgorod), Johnson controls GmBh (Moscow), AvtoVAZagregat, OAO (Togliatti)
Finding Quality Partners: A Review Of The Russian Automotive Component Sector42
18. TOPLIVNYE SISTEMY FUEL SYSTEMS
Contact information: General Director: Mikhail Igorevich MazurovAddress: 5, Samoylova Str., Saint-Petersburg, 192102, RussiaTel: +7 (812) 166 7748Website: www.topsys.spb.ru
Toplivnye Sistemy, OOO (Limited Liability Company) is located in Saint Petersburg, Russia’s second largest city, approximately 750 kilometers west of Moscow. Saint Petersburg is an industrial city with a population of approximately 5 million. The trademark of the products of this firm is PEKAR.
Toplivnye Sistemy, (the name means “fuel systems”) was founded in 1929 as the Leningrad Carburetor Plant. In 1999 the plant was privatized with a single major-ity shareholder. The company employs approximately 2,500, with approximately 1,200 production workers. Product development is handled by a staff of about 200, including 50 design engineers. This team works in AutoCAD, Compass and Inventor software. New products and foreign partners will be key to the future development of Toplivnye Sistemy since their present product line is threatened by the increasing adoption of fuel injection in Russian automobile engines. Management reports the development of new products for fuel–injected motors, and is interested in partner-ing with foreign firms for new products. Management also reports plans to purchase some new production equipment for new products.
The company’s first ISO 9001:1994 certificate was awarded in 1998. The current cer-tificate to ISO 9001:1994 was awarded in 2000. Currently the factory is working to implement ISO 9001:2000 for its next certification. Toplivnye Sistemy is also aware of ISO/TS 16949 requirements and has a long-term plan to certify to this standard.
Ownership: PrivateQuality system certification: ISO 9001:1994 standard issued in 2000 by Test SPb. At present, the company is preparing for certification in accordance with the ISO 9001:2000 standard.Major Suppliers: Zinc - Chelyabinsk; Brass - Krasnoyarsk, Verkhnaya Salda; Steel- Severstal, NPMZ
� Main products: Fuel injection system ele-ments, cooling systems pumps, electromagnetic valves, gasoline pumps, carburetors
� Sales: USD 300 Million in 2003
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 43
19. TREK
Contact information:General Director: Andrey Nikolaevich PaduchinDeputy Director for Human Resources: Vladimir SemenovDeputy Director for Quality: Evgeny Valentinovich KoganAddress: 31, Gotvald str, Miass, 456306, Cheliabinsk region, Russia Tel: +7 (35135) 760-75-31
Trek is located near Miass, in the Southern Urals, 200 km (120 miles) from Ekaterinburg, and 100 km (60 miles) from Chelyabinsk, the region’s capital. Miass is an industrial city with a population of approximately 180,000. Trek was founded at the end of 1995 by two private partners, starting with 10 employees and rented production equipment and facilities. Today the Company has two facilities, a two-story office building and a factory. These two facilities are located 10 minutes away from each other by car with a total of 3,500 m2 (11,550 square feet) at the production facility. Trek has young and dynamic management and its products are widely advertised and sold throughout Russia.
Trek has made strong efforts to move towards an international quality management system. Trek’s first ISO 9001 certificate was granted in 1999, and the current ISO 9001: 2000 and Russian GOST R ISO 9001-2001 certificates were awarded in April 2003. The Company operates a fully electronic document control system and has invested in outside consultants to assist in development of the company quality management system. Trek executives frequently present on their quality systems at Russian auto-motive conferences.
Ownership: PrivateQuality system /certification: ISO 9001: 2000; GOST R ISO 9001-2001 (Russian Standard) in April 2003.Major suppliers: Du Pont, USA; Bayer, Germany; TK OSPaZ, Orel; Tekhnopol, Moscow; Elastoimpex, Moscow; Concern Russian Defense Technology, Moscow; Zavod im.Degtyareva, Kovrov; Avtoagregat, Kineshma, UAZ, Miass; MMK, Magnitogorsk.Major customers: 77% – Distributors , 12% – Dealers, 9% – GAZ, 2% – KamAZAverage period of delivery to clients: 11 days (as reported)
� Main Products: Constant Velocity Joints (CV Joints), Tie Rods, Springs, and Shock Absorbers
� Sales: USD 8.1 Million in 2002
Finding Quality Partners: A Review Of The Russian Automotive Component Sector44
20. ZMZ
Contact information:General Director: Victor Vladimirovich Klochay Quality Director: Oleg Viktorovich VlasovAddress: Zavolzhye-2, Nizhny Novgorod District, 606522, Russia
Tel: +7 (83169) 66-8-42Website: www.zmz.ru E-mail: [email protected]
The Zavolski Motorny Zavod OOO (Zavolzhye Motor Factory, Open Joint Stock Com-pany), is normally referred to by its initials, ZMZ. The factory is located on the Volga River, 60 kilometers from the major city Nizhny Novgorod. ZMZ is a highly integrated producer of gasoline and diesel engines and engine bearings. Total employment is approximately 18,000, and ZMZ was founded in 1958. Annual sales in 2002 were reported at $225.5 million. In 2001 the factory became part of the private Severstal group, which later included ZMZ in a subsidiary, SeverstalAvto Group. Further in-formation on SeverstalAvto is located in the Russian OEM section of this IFC market study. ZMZ may be a good target for international suppliers since it expresses strong interest in out-sourcing many components.
In 2002 ZMZ produced approximately 250,000 engines which are used in off-road vehicles, commercial vehicles, and automobiles throughout Russia. According to ZMZ, the firm plans to supply over 217 thousand engines to RusPromAvto’s GAZ factory alone in 2004. The next largest customer is the UAZ factory in Ulyanovsk, a fellow member of the SeverstalAvto Group, and a producer of off-road cars and light commercial vehicles. Mr. Victor Klochay is general director of both UAZ and ZMZ.
To meet increasing market competition, including recent competition from foreign-produced engines specified for some Russian-design vehicles, ZMZ is investing to improve the performance of its engines and their quality. ZMZ reports that its invest-ment plan for 2003 was $17 million for new equipment and other modernization, as part of a 2002-2004 SeverstalAvto plan for a total of $52 million in investments. The engine bearings shop has been spun off as independent company.
ZMZ has contracted with the Austrian firm AVL for technical assistance in improv-ing its engine designs to meet demand for engines meeting the Euro 3 standard. The
� Main products: Gasoline and diesel engines, engine main bearings
� Sales: USD 225.5 Million in 2002
III. IFC Sector Review: Potential Supplier Partners and Customers in Russia 45
company goal is to achieve Euro 3 level emissions by the end of 2004. This new engine is planned to contain 70% out-sourced components.
ZMZ also is making strong efforts in quality management system improvement includ-ing investments in outside improvement consultants. In 2003 ZMZ certified the factory to the ISO-9001:2002 quality management system. According to ZMZ management, the firm plans now to work toward certification to ISO/TS 16949, the international automotive standard. ZMZ has installed a quality assurance system in final assembly based on the Ford system.
The company is also attempting to expand its international contacts and business. At present ZMZ reports that foundry products are exported to Germany. Some individu-als of the company’s staff speak English. Translators are available as required.
Ownership: Private, part of Severstal Group’s SeverstalAvto DivisionQuality system certification: November, 2003 –certificates to ISO 9001:2000, GOST R ISO 9001-2001 standards from “TUV-SERT” & “Russian Register”. The certificates are valid until autumn of 2006. The company is working on ISO/ТS 16949:2002 standard certification.Major suppliers: Severstal; GAZ (semi--finished materials); Avtopribor , city of Kaluga; Avtopri-bor, city of Vladimir; Legas, city of Kostroma; Tarasov plant; Fuel Systems, St. Petersburg.Major customers: Engines: 44% – GAZ; 39% – UAZ; 5% – PAZ; 12% – after market; engine bearings: AvtoVAZ.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector46
21. ZEIMLINE
Contact Information:General director: Georgy SolovyevAddress: 1, Yakovlev prospekt, Cheboksary, 428020, Chuvashia, RussiaTel: +7 (8352) 62-8-70Website: www.zeim.ru
ZEiM-Line is located in the city of Cheboksary, capital of the Chuvash Republic of the Russian Federation. Cheboksary is located in 770 km from Moscow, between Ni-zhny Novgorod and Kazan on the Volga River. Cheboksary is an industrial city with a population of approximately 460,000. Since the end of the Soviet Union, the Chuvash Repblic has remained a peaceful, integral part of the Russian Federation with a posi-tive attitude towards business and investment21.
ZEiM-Line was founded in 1994 as a subsidiary of the large Cheboksary Electronics and Mechanics Factory (ZEiM). The main production of ZEiM-Line consists of auto-motive controllers for fuel injected engines, vehicle antitheft systems and diagnostic equipment for electronic systems and fuel-injected engines. At present the firm has approximately 100 employees.
ZEiM-Line received its first ISO-9001 certificate in 2000, and at the end of 2003 the Company reported itself in the process of obtaining a new ISO-9001 certificate.
The parent firm ZEiM holds an 85 percent stake in the subsidiary, with the remaining 15 percent held by various individuals. ZEiM was founded in 1958 and privatized in 1992. In 2000 ZEiM became a member of the RUSEL (www.rus-el.ru) holding company which includes over 20 plants and companies operating in the electronics sector, with a total of 7 thousand employees. Annual sales of RUSEL are more than $120 million.
Ownership: Private: ZEiM – 85%; individuals – 15%.Quality system certificate: The term of ISO 9001: 1994 issued in 2000 expired in May 2003; the Company is in the process of obtaining a new certification.Major suppliers: PetroinTrade, Saint Petersburg - 12%; EFO, Saint Petersburg – 24%; Alkont, Mos-cow – 40%; Galina, Saint Petersburg – 7%; lteptrade, Moscow; SPU Plant, Saint Petersburg.Major customers: AvtoVAZ – 46%; GAZ – 46%; UAZ – 4%; Aftermarket – 4%.
� Main Products: controllers for fuel injected engines, vehicle antitheft systems and diagnostic equipment for electronic systems
� Sales: USD 8.1 Million in 2003
21 A Report on the Chuvash Republic and companies of the region has been made by the US Department of Commerce and is available at: http://www.bisnis.doc.gov/bisnis/bisdoc/0401ElectroChuvashia.htm.
47
IV. Russian OEM Review
Russian OEMs are of interest to foreign investors since most Russian OEMs are moving toward more foreign participation in their designs and production. In fact most Russian OEMs have either already partnered with a foreign OEM, or are working towards such a partnership. As noted above, these OEMs also account for upwards of 90% of car unit production in Russia as of 2003. To assist foreign firms looking at these OEMs as potential partners or customers, brief summaries of the leading OEMs producing Russian-design cars, along with contact information appear below. These firms are often referred to as the “traditional” Russian OEMs. There are six major traditional Russian OEM groups:
Car production of the major groups is shown on Figure 6, indicating the dominant position of AvtoVAZ. Production locations are shown on Figure 7.
Group Main factories Group Main factories
AvtoVAZ:
OAO AvtoVazOAO SeAZ
RusPromAvto:
OAO GAZOAO Pavlovo BusOAO LiazOAO Ural AZ
SOK:OAO RosLadaOAO Izmash-AvtoComponent Factories
SeverStalAvto:OAO ZMZOAO UAZ
Kamaz: OAO Kamaz Moscow Group: OAO Moskvich AMO ZIL
8 00000
6 00000
4 00000
2 00000
0AvtoVAZ IzhAvto GAZ KamAZ UAZ SeAZ
Units of Russian-design cars sold in 2003
Figure 6
Source: ASM Holding
Finding Quality Partners: A Review Of The Russian Automotive Component Sector48
AV TOVAZ
CEO: Vladimir Vasilievich KadannikovAddress: 36, Uzhnoye Shosse, Togliatti, Samarskaya Region, 445633, RussiaTel/Fax: +7 (8482) 73-82-43; +7 (8482) 73-71-71Website: www.vaz.ru
Description
The AvtoVAZ Group is Russia’s largest domestic producer of passenger cars and produces many of its own components. The main plant is located in Togliatti, near Samara, and was built as greenfield in 1970 in cooperation with the Italian firm FIAT. Currently the company employs over 120,000 with over 70% of the market. AvtoVAZ has seen its market share and production volumes steadily decline since the end of the Soviet Union. In 2003 the firm produced 699,889 automobiles, compared to 703,000 in 200222. 2002 sales exceeded 3 Billion US Dollars.
AvtoVAZ was privatized in 1993. According to the investment company Aton, more than 53% of the stock of AvtoVAZ is controlled by company management (See figure 8).
Number on the
mapCity Company
1 Nizhny Novgorod RusPromAvto — GAZ
2 Togliatti AvtoVAZ
3 Ulyanovsk SeverstalAvto — UAZ
4 Izhevsk SOK Group
5 Naberezhnye Chelny KamAZ
6Moscow Moscow Group
(Moskvitch)
Figure 7
Moscow
6
3
2
14
5
Traditional Russian OEM locations in Russia
22 “Vedomosti” of February 5, 2004, ASM Holding
IV. Russian OEM Review 49
Strategy
With its large facilities and very low prices ($2,500-$10,000 – see annex 13), AvtoVAZ has so far been able to maintain its dominance of the domestic car market. This po-sition was strengthened by the introduction of protective tariffs on imports of used foreign cars. However, increasing Russian income levels and financing options mean that AvtoVAZ faces increasingly strong competition from locally-assembled foreign cars as times goes on.
AvtoVAZ appears to be implementing two strategies to meet the challenge of foreign design cars. First, AvtoVAZ has formed the GM-AvtoVAZ joint venture company, co-located with its main factory at Togliatti. The JV produces the “Chevy Niva”, an incrementally improving version of the AvtoVAZ Niva 4x4. Next, AvtoVAZ pushed very hard for the introduction of a new model at the joint venture. In late 2003 GM announced that this will be a Chevy-branded sedan, with the body design and other
53%
AvtoVAZ management
47%
External investors
AvtoVAZ
employees
18%
Vneshtorgbank
8%
Russian Federal
Property Fund
2,05%
Shares on the
stock exchange
13%
Less than 1%
converted to
GDR
Other investors,
5%
AvtoVAZ Group
OAO AvtoVAZOAO SeAZ
Shares in more than 240 entries
Direct
share
ownership
Figure 8
AvtoVAZ structure
Source: Aton
Finding Quality Partners: A Review Of The Russian Automotive Component Sector50
elements from GM’s Opel Astra, to be called the Chevy Viva (see GM section). It ap-pears that some percentage of components for the new vehicle will be of Russian design and manufacture. As with the Chevy Niva many of these components may be supplied by AvtoVAZ to the JV.
The second strategic effort, from AvtoVAZ itself, will be the introduction of the Kalina car, planned for 2004. The Kalina is apparently designed as a higher-quality successor to the Lada series.
In 2003 AvtoVAZ produced five main vehicles in various versions: • Klassika ($5,500)• Samara ($6,000) • Niva ($9,500)• Lada ($6,900)• OKA ($2,500)23
Descriptions and photographs of the main models produced by AvtoVAZ and other OEMs are provided in Annex 4.
23 Approximate average dealer price in 2003. See www.vaz.ru
IV. Russian OEM Review 51
RUSPROMAV TO
CEO: Alexander YushkevichAddress: 17, Kotelnicheskaya nab., Moscow, 109240Tel: +7 (095) 725-09-90; Fax: +7 (095) 720-53-92 Website: www.ruspromauto.ru
Description and Strategy
At the end of 2003, The RusPromAvto holding included the following divisions: Nizhegorodskiye Automobiles Division: (GAZ (Gorky Automobile Factory), Volga Motors, Volga Tractor Factory, Saransk Dump Trucks and Arzamas Machine-Build-ing Plant); Bus Division: (Pavlovsk, Likinsk and Golitsyn bus manufacturers); Engine Division: (YaMZ, YaZTA and Tutayevsky Motor Works); Heavy Trucks Division: (Ural Auto Plant) and the Construction-Equipment Division: (Bryansk Arsenal, Tver Excavator).
RusPromAvto
Investment Company
Bazovy element
Automobiles
- GAZ ;
- Volzhskie Motors
- Saransky
Zavod
Avtosamosvalov ;
- Arzamassky
mashzavod;
Buses
- PAZ;
- LiAZ;
- GolAZ;
- KavZ;
- Kanashsky
avtoagregatny
zavod;
Engines
- YaMZ;
- YaZTA;
- Tutaevsky
Motorny;
HeavyTrucks
- UralAZ
Construction
- Chelyabinsk
Construction Works;
- Bryansky Arsenal;
- Tverskoy Ekskavator;
RusPromAvto Structure in 2003
Figure 9
Source: www.basel.ru
Finding Quality Partners: A Review Of The Russian Automotive Component Sector52
GAZ, OAO
General Director: Alexey Georgievich BarantsevAddress: 88, Prospekt Lenina, Nizhny Novgorod, 603004, RussiaTel/Fax: +7 (8312) 56-12-25Website: www.gaz.ru
Description
GAZ is RusPromAvto’s largest property and is Russia’s largest domestic producer of light commercial vehicles (LCV), minibuses, minivans, and light trucks. The factory also produces the “Volga” passenger car, mass production of which started in 1970.
GAZ was founded in 1932 as a turnkey factory constructed by Ford Motor Company and producing copies of the Ford model A car and model AA truck. Starting in December 1992 GAZ introduced a new mid-size LCV called the “Gazelle”. The “Gazelle” is now the company’s top-seller and has become widely used throughout Russia. At the end of 2003 dealer prices for Volga cars were approximately 6 thousand US Dollars.
According to its preliminary financial results, in 2003 GAZ produced and sold 56,783 vehicles, which is a decrease of 8,865 units over 2002.
Strategy
GAZ, and RusPromAvto as a whole, appear to be following several strategies to meet increasing competition in the market. To date the most visible effort has been a con-tract with the lean production consulting firm YOMO for improvement and training in Toyota Production System (Lean Manufacturing) elements for quality and efficiency improvements. GAZ has reported significant quality and efficiency improvements as a result of the YOMO project and RusPromAvto reportedly plans to spread this effort to more factories in the Group24.
In early 2004 the CEO of RusPromAvto is reported to have stated that the firm will follow the lead of the other Russian OEMs and find a foreign partner for the joint production of foreign-design cars.
24 See “AvtoBiznes” magazine of December, 2003.
IV. Russian OEM Review 53
K AMAZ, OAO
General Director: Sergey Anatolievich KogoginAddress: 17/2, Bld.1, Verkhneradichevskaya Str., Moscow, 109004, RussiaTel: +7 (095) 912-64-80; +7 (095) 912-50-19Website: www.kamaz.net
Description
KamAZ Inc is a leading manufacturer of heavy-duty trucks in Russia, and, like Av-toVAZ, was originally built as a greenfield in cooperation with FIAT. The company was privatized in 1991. Aside from the main product, heavy trucks, the company also produces the Oka car at ZMA (Zavod Microlitrazhnih Avtomobiliy – Plant for Micro-displacement Cars), co-located with the truck factory in Naberezhnye Chelny (Republic of Tatarstan). The Company’s ownership structure is presented below.
KamAZ
Russian
Federation Ministry
of State Property,
34.01%
OAO KamAZ
Tatarstan Ministry
of Property
and Land,
11.6%
Vneshtorgbank,
19.41%;
Sberbank,
2.82%
EBRD,
6.79%
KamAZ
International
Management
3.82%
OAO ZMA
Figure 10
KamAZ structure
Source: www.kamaz.net
Finding Quality Partners: A Review Of The Russian Automotive Component Sector54
SOK GROUP
President: Rustem ShiyanovAddress: 7 Proseka, Sanatory “SDP”, Samara, 443125, RussiaTel/Fax: +7 (8462) 94-02-00; +7 (8462) 94-22-22Website: www.sok.ru
Description
The SOK Group of companies is a large private company controlling a number of factories in Russia. SOK’s public data indicates that it is the second largest passenger car producer in Russia after AvtoVAZ. The Group’s prime property is IzhMashAvto in Izhevsk, which produces some older AvtoVAZ models under its own brand “Izh”. SOK also controls RosLada, an automotive plant in Syzran – Samara region, which also makes some older AvtoVAZ car models. At least 40 other Group factories produce a variety of automotive component parts or work in other sectors. In 2002 overall car production by the SOK Group totaled 121,172 cars. Total employment in the group is reported to be over 100,000. The ownership structure of the SOK Group is not dis-closed, but is widely rumored to include management of AvtoVAZ.
Strategy
The SOK Group appears to be responding to increasing competition in the market by very active efforts to acquire foreign technology and designs. In 2003 SOK announced the purchase of a production license and tooling to produce KIA (Korea) “Spectra” Sedans at Izhevsk. This will enable SOK to make the transition from assembly of Rus-sian-designed cars to a foreign design. The SOK Group reports that it eventually plans to create capacity to produce up to 120,000 units per year of the KIA design.
In addition, the Group has reported that in at least one instance it purchased an Ital-ian lighting components producer, reportedly in order to acquire new product and production technologies25.
SOK has also announced the establishment of a joint venture with an Italian com-pany, Autocomponent Engineering, which is currently supplying steering wheels to the GM-AvtoVAZ JV. The new joint venture will manufacture airbags for both the GM-AvtoVAZ JV and for AvtoVAZ itself. Production of 80,000 steering wheels with air bags is planned for 200426.
25 “SOK Group is heading out to Europe” – the “SOK Group purchased an Italian automotive lighting producer. The paper doubts that the company will launch business in Europe, rather this investment in foreign assets will allow the company to bring foreign technologies to the production of its automo-tive components in Russia. Vedomosti, 27.11.03
26 Source: US Department of Commerce, St. Petersburg office.
IV. Russian OEM Review 55
IZHAV TO
General Director: Mihail Nikolaevich Dobyndo Address: 5, Avtozavodskaya, Izhevsk, 426060, RussiaTel/Fax: +7 (3412) 26-72-67; 26-58-52; 26-71-46, 26-78-00Website: www.izh-auto.com
Izh-Avto, located in Izhevsk, capital of the Udmurtia Republic, produced 78,495 cars in 2003 which is a 19.5% increase over 2002. The Klassica VAZ-2106 and VAZ-2104 accounted for most of its production. Izh-Avto’s production has increased by over 500% since 1999. Total market share of Izh-Avto in 2003 was 9.6% and total employ-ment was over 12,400.
6 191 561
3 456 517
1 523 720
515 628
309 321
2002
2001
2000
1999
1998
Izh-Avto sales growth, thousand Rubles
Figure 11
Source: www.sok.ru
Finding Quality Partners: A Review Of The Russian Automotive Component Sector56
Strategy
In addition to the plan to produce the KIA Spectra sedan, Izh-Avto has indicated plans to produce its own new designs in 2004 and 2005. These are the the Fabula 4X4 and the Izh-27171 4X4. By mid-2004 reports indicated that pilot models of both the KIA and the Fabula were beginning to come off the assembly line27.
78 000
47 762
24 691
9 3706 5097 947
1997 1998 1999 2000 2001 2002
Source: www.sok.ru
Production at Izh-Avto, units
Figure 12
27 “Za Rulem” Magazine of July 2004, p. 136.
IV. Russian OEM Review 57
ROSLADA
General Director: Vladislav Borisovich DzilovAddress: 18, Saratovskoe Shosse, Syzran, 446025, RussiaTel/Fax: +7 (84643) 5-70-39 E-mail: [email protected]
RosLada is located in Syzran (Samarskaya region) and is a former defense plant. In 1998 the factory obtained a license for assembly of the VAZ-2106 Klassica model car. In 2000 the factory added the VAZ-21093 and the VAZ-2104 and in 2002 the VAZ-2107, all variants of the Klassica model.
RosLada reportedly has 1750 employees with sales of almost 3 billion Rubles in 2002 (approximately 100 million US Dollars). Latest data available from the company in-dicate that in 2003 it produced 28,099 units.
Figure 13
2002
2001
2000
1999
2 977 667
2 554 137
1 777 530
978 389
RosLada sales growth, thousand rubles
Source: www.sok.ru
Thousand Rubles
Finding Quality Partners: A Review Of The Russian Automotive Component Sector58
SEVERSTALAV TO
General Director: Vadim Shvetsov Address: 30, Ulitsa Mira, Cherepovets, Vologodskaya Region, 162600, RussiaTel/Fax: +7 (8202) 56-80-09; +7 (8202) 57-12-76Website: www.severstalauto.ruE-mail: [email protected]
Description
Severstal is a leading Russian producer of steel and metal products including automo-tive steel. It is the parent company of the SeverstalAvto Group, which consolidates Severstal’s automotive properties.
Information on SeverstalAvto’s ZMZ28 and UAZ factories may be found below. These two companies share the same general director. Reportedly over 43,000 employees work for the various factories in SeverstalAvto, also referred to as the Severstal Au-tomotive Division.
Figure 14
Severstal Group, OAO
SeverstalAvto, OAO
UAZ ZMZ
Engines for
GAZ and UAZ
SeverstalAvto structure
Source: www.severstal.ru
28 ZMZ engine Factory, see section 3, “Company’s Profiles” for detailed information on the company.
IV. Russian OEM Review 59
ULYANOVSK AUTOMOBILE FAC TORY UAZ, OAO
General Director: Viktor Vladimirovich KlochayAddress: 30, Ulitsa Mira, Cherepovets, Vologodskaya Region, 162600, RussiaTel/Fax: +7 (8422) 40-60-38Website: www.uaz.ru
Description
The Ulyanovsk Automobile Factory (UAZ) was established in 1941 and currently manufactures 14 models of small 4x4s and 4x4 minibuses29. UAZ employs over 20,000. 2003 Sales were reported at $265.5 million, an increase of over 7%, and production was estimated at 32,748 vehicles, a decrease of 2.6%.
Strategy
The main strategy of SeverstalAvto appears to be to partner with a foreign OEM. By early 2004 SeverstalAvto was widely reported to be in final negotiations to form such a partnership. In 2003 the company announced that it would not offer new models, but would upgrade existing models, such as its improved small 4x4, the Hunter.
29 The company and its vehicles are normally referred to by the initials UAZ, pronounced “OO-WAAZ”.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector60
MOSCOW GROUP HOLDING
Owner: City of MoscowAddress: 42, Volgogradsky Prospekt, 117607, Moscow, RussiaTel: +7 (095) 911-09-91; Fax: +7 (095) 179-02-09
The City of Moscow government has the main ownership stake in the huge “Lenin Komsomol Automobile Factory (AZLK), factory, also called “Moskvich” which is located inside the city limits. The factory most recently produced cars under the “Moskvich” badge. AZLK has been closed for several years but the city of Moscow has created a joint venture with the French OEM Renault, called AvtoFramos (See section 5 under “Renault”) to operate on a part of the factory territory. At the end of 2003, press reports indicated that the bankruptcy of the main Moskvich factory was still proceeding.
61
V. Foreign OEM Review
FOREIGN OEMS IN RUSSIA
Foreign OEMs operating in Russia or selling into Russia represent the fastest grow-ing segment of the automotive market and eventually they will likely be the major producers in the Russian market. To assist foreign firms looking at these OEMS as potential customers, brief summaries of their activities are presented below, along with contact information. Pictures of the main models produced in Russia can be found in Annex 13.
Sales of foreign cars continue to grow by 10–15% each year. With the introduction of protective tariffs, sales of locally assembled vehicles are expected to increase most rapidly. Figure 15 shows the yearly increases in production for KIA and Hyundai cars assembled in Russia prior to the impact of the tariff increases.
20000
15000
10000
5000
02000 2001 2002 2003
KIA
Huyndai
Figure 15
Units of KIA and Huyndai cars sold in 2000-2003
Source: official data from the companies
According to United Financial Group analyst, Elena Sakhnova, about 76 thousand foreign cars were assembled in Russia in 2003, and she predicts that production will increase to 115 thousand foreign cars in 2004. At the same time about 190 thousand new foreign cars will be imported to Russia30.
30 Telephone conversation with the analyst.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector62
Figure 16 indicates 2003 sales for all foreign makes sold in Russia. Annexes 14 and 15 provide further details.
Figure 16
Source: ASM-Holding
Foreign car sales in Russia: 2003
ToyotaDaewoo
Ford
HyundaiKIA
RenaultNissan
Mitsubishi
PeugeotOpel
Volkswagen Skoda
VolvoSuzuki
BMWHonda
MercedesAudiCitroen
MazdaLand RoverLexus
SubaruChrysler/Jeep
Chevrolet
0 5000 10000 15000 20000 25000 30000Units
Other
V. Foreign OEM Review 63
FORD MOTOR COMPANY ZAO
Ford CIS President: Henric HenzenGeneral Director, Ford Motor Company, ZAO: Murray Gilbert Address: P/O Sheglovo, Leningrad Region, Vsevolozhsky Region, 188676, RussiaTel: +7 (812) 346-71-51; +7 (812) 346-71-31 Fax: +7 (812) 346-71-87Website: www.ford.ru
Description
The Ford Motor Company factory in Vsevolozhsk opened in June 2002 with an invest-ment of approximately 150 million US dollars. The capacity of the factory is 25,000 cars a year. The Ford site contains space that would allow further increases in volume in the future up to 100,000 units. The factory assembles three versions of the Ford Focus car: sedan, hatchback and universal.
Ford produced 16,000 Ford Focus cars in 2003 and has stated that the plant will in-crease production to 27,000 in 2004. Company sales in Russia through its network of official dealers increased 250 percent in the first half of 2003, and Russian customers have been willing to put a deposit down and wait several months for the Russia-pro-duced car.
Strategy
Ford is now operating under Presidential Decreee no. 135 (see Section 3 above) to import component parts duty free in exchange for meeting local content requirements. Ford has three localization offices in Russia: in Saint-Petersburg, Samara and Nizhny Novgorod. In order to further stimulate sales Ford has aggressively pioneered a car loan program in Russia.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector64
GENERAL MOTORS JSV “GMAV TOVAZ”
General Director (President) of GM Russia: Heidi McCormackGM-AvtoVAZ General Director: John MylonasAddress: 37, Vokzalnaya Street, Togliatti, 445967, RussiaGM Corporate Representation: 11, Gogolevsky bulvar, Moscow, 119019, RussiaTel: + 7 (095) 777-68-68; + 7 (095) 777-68-86 Fax: + 7 (095) 777-60-65Website: www.generalmotors.ru; www.gm-avtovaz.ru
Description
The GM-AvtoVaz joint venture was created in 2001 with an original capitalization of $238.2 million. Ownership is reported as: AvtoVaz (41.5%), GM (41.5%) and Euro-pean Bank for Reconstruction and Development (17%). The plant opened officially on September 23, 2002.
Currently, the venture produces the Chevrolet Niva, which is an incrementally improv-ing version of the VAZ-2123 “Niva” small 4x4 originally developed by the Soviet Union in the late 70s. Almost all of the components of this vehicle are made in Russia. Sales of the Chevy Niva began on November 1, 2002 and by the end of 2003 the factory had produced about 30 thousand vehicles. For 2004, production of 60,000 Chevy Nivas is planned, increasing to 75,000 vehicles in 2005 as the plant is upgraded.
Strategy
In November, 2003, GM announced plans to produce a new model at the beginning of 2005 similar to the Opel Astra. The plan is to produce up to 17 thousand cars a year for the Russian market. Like the Niva, the new car will be sold under the Chevrolet badge and reportedly will be called the Chevy Viva.
GM has announced that, like Ford, GM-AvtoVAZ will promise 50% local content in exchange for import tariff relief. This implies plans for more imported components and increased opportunities for foreign suppliers to add content to the GM-AvtoVAZ vehicles. Also planned are exports of the Chevy Niva with Opel 1.8-liter engines (cur-rently the vehicles are equipped with Russian-made 1.7-liter engines) in the first quarter of 2004. Exports are planned to Europe, the Middle East, Asia and Latin America. GM has also announced plans for licensed assembly of GM Hummer II vehicles from kits at the Russian-owned Avtotor factory in Kaliningrad.
V. Foreign OEM Review 65
RENAULT JSC “AV TOFRAMOS”
General Director: Jean-Michele JalinierAddress: 35, Vorontzovskaya Street, Moscow, 109147, RussiaTel/Fax: +7 (095) 775-40-00; +7 (095) 775-48-48Website: www.renault.ru
Description
The AvtoFramos joint stock company was formed as a joint venture between Renault and the Moscow City government. The assembly plant is located on part of the terri-tory of the now-closed “Moskvich” AZLK factory in Moscow. The JV started low-rate assembly in August 2002 of the Renault Symbol car, which was Renault’s bestseller in Russia in 2003 with sales of about 4,000. About one third these were assembled in Russia.
Strategy
Renault has announced plans to invest 230 million Euros for assembly of the Logan Sedan at Avtoframos, starting in 2005. Renault’s announcement that the Logan target price for Russia would be 7,000 Euros caused a sensation in the market since this represents a direct challenge to the low-priced Russian-design vehicles31. The Russian plant will open a few months after the new car goes into production at the Renault Dacia plant at Pitesti in Romania. AvtoFramos currently has no announced public plans to source components locally in Russia. Capacity at Avtoframos is planned to be 60,000 cars per year. When the Logan goes into production, output of the Clio in Russia will cease. Renault now has 50 official dealerships in 27 Russian cities.
31 “Za Rulem“ Magazine of August, 2004, p. 36
Finding Quality Partners: A Review Of The Russian Automotive Component Sector66
AV TOTOR: KIA, BMW
General Director: Valery Sokolov Address: Office in Moscow: Solyanka Street, 3, Building 3, Moscow, 109028, RussiaTel: + 7 (095) 924-48-91; Fax: + 7 (095) 923-14-11Office in Kaliningrad: 4, Magnitogorskaya Street,Kaliningrad, 236013, RussiaTel/Fax: +7 (0112) 44-89-69Website: www.avtotor.ru
Description
Avtotor is a Kaliningrad-based company fully owned by Russian investors, performing contract vehicle assembly. Avtotor assembles 6 KIA vehicles (from sedans to off road vehicles), and 3 BMW models from kits; C class, D class and E class.
Strategy
Planned annual capacity is 35 thousand cars. GM has announced that Hummer II vehicles will also be assembled by Avtotor starting at the end of 2003.
V. Foreign OEM Review 67
TAGAZ: HYUNDAI, DAEWOO, CITROEN
General Director: Gennady Vladimirovich RyadnovAddress: 2, Instrumentalnaya Street, Taganrog,347923, RussiaTel: +7 (8634) 32-04-00; Fax: +7 (8634) 31-81-57Website: www.tagaz.ru
Description
The Taganrog Automotive Factory (TagAZ) is based in Taganrog, Russia and assembles the Hyundai Accent for Hyundai and the Orion-M for Daewoo. The factory also as-sembles the Citroen Berlingo under the Doninvest badge32. In 2002 the plant assembled about 2,500 cars and planned to assemble 11,000 cars in 2003.
Strategy
TagAZ has reported plans to add production of the Hyundai Sonata 5 car in 2004 with production at 5000 per year.
32 The “Don invest” Group. See www.doninvest.ru
68
VI. Annexes
1. International Automotive Suppliers in Russia
This section provides a list of many of the investments that have already been made in the Russian market by international automotive components suppliers. Many of these firms are willing to offer advice to others looking at locating production in Rus-sia. Their ventures are located all across Russia.
# Supplier Commodity Location Partner
1 Michelin Tires Moscow Region Greenfi eld
2 Continental Tires Moscow Moscow Tire Factory
3 Nokian Tires Kirov Kirov Tire Factory
4 Matador, Slovakia Tires Omsk Omsk Tire Factory
5 Glaverbel/Splintex Glass Nizhny Novgorod Bor Glass Factory
6 Siemens VDO Instrument Cluster Chistopol Precision Instruments Factory
7 Bosch Headlamps Ryazan Bosch
8 Bosch Fuel Supply/Injection Systems
Saratov
9 Bosch Spark Plugs Saratov
10 Lear Seats Nizhny Novgorod
11 Johnson Controls Seat Components Nizhny Novgorod/Tver
12 Nypro, USA Injection Molded Plastics (small)
Moscow
13 Ingersoll Rand (InstrumRand)
Power Tools Nizhny Novgorod (Pavlovo)
GAZ factory
14 Delphi Wire Harness Samara Samara Cable Company
Table 1International Automotive Suppliers in Russia
VI. Annexes 69
15 Connecto AB, Sweden
Wire Harness Vyborg Finnskor
16 Bentler Chassis Structures Engineering (R&D only)
Veliky Novgorod
17 TRW Switches Pskov Technical Assistance
18 TRW Brake Components Kineshma Technical Assistance
19 Breed Technologies Airbags/Steering Wheels
Togliatti Autocomponent Engineering (Italy) Plastic, Syzran (Rus)
20 Tenneco Automotive Exhaust Systems Togliatti
21 Engelhand Catalysts Urals
22 Henkel Teroson NVH - adhesives Syzran Plastic, Syzran
23 ZF Power Steering Togliatti Technical Assistance
24 ZF Automatica Transmissions/Axles
Saint-Petersburg
25 BATTRADE, Turkey Batteries Moscow Region
26 RAC (Russian Automotive Components)
Supplier Park: Seats, Exhaust, Glass
Togliatti List of global suppliers TBD
27 VOITH Bus transmissions Kazan KMPO
Finding Quality Partners: A Review Of The Russian Automotive Component Sector70A
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VI. Annexes 71
Annex 3. Information Sources On Russia
There are many public and private sources of information on the investment potential of Russia today. Rather than duplicate these studies we have chosen to provide refer-ences. Note that the IFC makes no representation of the reliability or accuracy of any information contained in these sources. Sources that are only in Russian language are marked with an asterix*.
1. GENERAL INFORMATION AND MACROECONOMICS
1. Goskomstat, the Russia Federation’s State Statistics Committee, includes cur-rent information on macroeconomic developments in Russian and English.
2. World Bank www.worldbank.org and the World Bank Russia http://www.worldbank.org.ru (including the latest Russian Economic Reports that are published by the World Bank twice a year).
3. Foreign Investment Advisory Service (part of the World Bank Group) — www.fias.net.
4. International Monetary Fund. Macroeconomic information on Russia. http://www.imf.org/external/country/RUS/rr/index.htm.
5. Market Access Database of the European Union including macroeconomic information and information on trade barriers http://mkaccdb.eu.int/.
6. US Department of Commerce. 1) BISNIS — Business Information Service for the Newly Independent
States — http://www.bisnis.doc.gov/bisnis/;2) www.buyusa.gov/russia/en; 3) U.S. Commercial Service in Russia:
— The U.S. Commercial Service in Moscow, Russia. Geoffrey Cleasby, Commercial Attache, 23/38 B. Molchanovka Str., Bldg 2, 121069, Moscow, Russia; Tel.: 7 095 737 50 13; Fax: 7 095 737 50 33; [email protected].
— The U.S. Commercial Service in Saint-Petersburg, Russia: Tel. 7-812-326-25-81; Fax. 7-812-326-25-61, contact person: Alexander Kansky, Commercial Specialist, E-mail: [email protected].
7. Center for Macroeconomic Analysis and Short-Term Forecasting. http://www.forecast.ru.
8. Institute for the Economy in Transition. Including information about Russian economy (trends and Perspectives), Industrial survey, analytical information. http://www.iet.ru/.
9. The Central Bank of the Russian Federation. http://www.cbr.ru.10. Ministry of Finance of Russian Federation. http://www.minfin.ru/.11. Center for Economic and Financial Research/CEFIR. http://www.cefir.org/.12. Russian-European Center of Economic Policy (RECEP). A leading periodical
of statistics and analysis on the Russian economy. http://www.recep.org/.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector72
13. VEDI, Econometric Unit. Includes up-to-date statistical and analytical materials about Russian economy. http://www.vedi.ru/.
14. Ministry of Taxation of the Russian Federation. http://www.nalog.ru/eng/.15. American Chamber of Commerce in Russia. http://www.amcham.ru/.16. Economic Expert Group. http://www.eeg.ru/(e)index.html.17. Open Budget Regions of Russia. http://openbudget.karelia.ru/eng/main.shtml18. SIORA. Information about Russian economy, industry, companies and Russian
regions. http://www.russianbusinesssite.com/.19. Site of Russian Foreign Trade «Russia-Export-Import» http://www.rusimpex.ru/20. ISI Emerging Markets Company and industry information, financial market
data, and macroeconomic analysis. http://site.securities.com/.21. Russian bond market and business information www.cbonds.info.22. Russia: all 89 Regions Trade and Investment Guide www.ctecpub.com.23. Russian Import-Export site — a forum for foreigners and Russians to find trade
partners. www.users.globalnet.co.uk/.24. Import and Export Market reports by country www.icongroupline.com (paid
service).25. The Moscow International Business Association — www.miba.ru.26. The Russian National Chamber of Commerce & Industry — www.tpprf.ru.27. The European Business Club of Moscow — www.ebc.ru.
2. FINANCIAL MARKETS
1. Russian Trading System (RTS). http://www.rts.ru/engl/.2. Moscow Interbank Currency Exchange (MICEX). http://www.micex.com/.3. Russian Financial Market. Red-stars.com/financials. http://www.rsf.ru/.4. United Financial Group. http://www.ufg.ru/.5. ATON investment company http://www.aton.ru/en/.6. Nikoil investment company http://www.nikoil.ru.7. Troika Dialog investment company http://www.trodial.ru/.8. Renaissance Capital http://www.rencap.com/eng/.9. Rustocks.com. http://www.rustocks.com.
3. AUTOMOTIVE SECTOR
1. Ernst and Young in Russia http://www.ey.com/global/content.nsf/Russia_E/Home
— International Automotive Supplier Industry in Russia, Survey Report, March 2003. Available at: http://www.ey.com/global/content.nsf/Rus-sia_E/International_Automotive_Supplier_Industry_in_Russia_-_Execu-tive_Summary. For further information contact: Jean-Francois Tremblay, Tel. 7 (095) 705 9292, E-mail: [email protected].
VI. Annexes 73
— For automotive and Industrial Production see http://www.ey.com/global/content.nsf/Russia_E/Automotive_and_Industrial_Production.
2. KPMG www.kpmg.ru.3. PriceWaterhouseCoopers. www.pwcglobal.ru; http://www.pwcglobal.com/Ex-
tweb/industry.nsf/docid—- Global Automotive Publications. 4. *Russian National Association of Automotive Component Producers. www.
napak.ru5. *Russian National Automotive Research Institute. www.nami.ru.6. *Russian automotive news. www.autonews.ru.7. AutoBusiness — Automotive Manufacturing Magazine. http://www.abiz.
ru/eng/.8. Za rulem — Automotive Magazine. http://www.zr.ru9. Automotive News Europe. http://www.autonews.com
10. Agency of Innovation Marketing (“AIM”). http://www.aimpress.ru/2003-9/in-dex_eng.xml. Monitoring and marketing studies in the Russian market.
4. ANALYST REPORTS
1. Renaissance Capital: The Russian Automotive Sector: Live And Let Die, May 2003. Contact: Natasha Zagvozdina, Tel. 7 (501) 258 7753, E-mail [email protected].
2. MarketOption, Inc. a Boston-based marketing and research company directed exclusively toward the Russian market. www.marketoption.com.
3. International Business Strategies, research company providing international market research reports on more than 130 topics from more than 75 countries. www.internationalbusinessstrategies.com .
4. Datamonitor.com, online service providing sector, company and news reports. www.datamonitor.com (paid service).
5. The Emerging Markets Companion, Inc. Sector and company information for different countries. www.emgmkts.com.
6. IDC. Country sector research reports. www.idc.com (paid service).7. ASM-Holding. www.asm-holding.ru. Paid reports with data on the automotive
market, including component sales, are available.8. Ladaonline. Automotive information analytical center. www.ladaonline.ru
5. ANALYSIS and INFORMATION WEBSITES
1. *Russian RBC Business News Service www.rbc.ru.2. AK&M /Analytical Information Agency/ http://www.akm.ru.3. Interfax News Agency. Provider of political, business and financial information
from Europe and Asia with special emphasis on emerging markets. http://www.interfax-news.com/.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector74
4. Finam.ru/Russian Full Service Investment Holding. Latest financial news, analytical information. http://www.fin-rus.com.
5. Russian Information Agency Novosti. http://www.rian.ru/rian/intro.cfm.6. Prime-Tass. Business news agency. http://prime-tass.com/.7. The Information Telegraph Agency of Russia (ITAR-TASS) http://corp.itar-
tass.com/english/about/.8. Integrum World Wide. Provides access to over 1300 full-text databases of central
and regional newspapers, magazines, bulletins and other sources of informa-tion. http://www.integrumworld.com/eng_test/.
9. Library of Publications of the Carnegie Moscow Center. http://pubs.carnegie.ru/english/.
10. Information Agency Reuters. www.reuters.ru.11. Columbia University. http://www.columbia.edu/cu/sipa/REGIONAL/HI/russia.
html.12. U.S. Department of Energy. Office of Fossil Energy. http://www.fe.doe.gov/in-
ternational/russia.html.13. Russia on the Net. Government Legislation, Legislation of Uzbekistan, Database
on Russian Laws, links to Garant Legal Databases, Garant Saint-Petersburg, Russian Constitution. http://www.ru/eng/index.html.
14. Russia at your fingertips — information for investors and businessmen. www.publications-etc.com/russia/.
15. Consultant Plus. Legal information systems. www.consultantplus.ru16. Garant. Russian legislation with commentary. www.garant.ru
6. NEWSPAPERS, MAGAZINES
1. *Vedomosti newspaper. www.vedomosti.ru.2. *Expert magazine. www.expert.ru.3. *Financial Director magazine. www.fd.ru.4. Internet Gazeta newspaper http://www.gazeta.ru/english/index.shtml.5. *Lenta Internet newspaper www.lenta.ru.6. The Moscow Times newspaper. http://www.themoscowtimes.com/.7. The St. Petersburg Times newspaper. http://www.sptimes.ru/.8. Russia today. Business information and online news service http://www.rus-
siatoday.com.9. The Russia Journal (daily). News source from Russia. http://www.russiajournal.
com/.10. The Russia Journal (monthly magazine). http://www.therussiajournal.
com/.11. * Kommersant Publishing Group – daily paper “Kommersant”, weekly maga-
zines “Dengi”and “Vlast”, monthly car-magazine Avtopilot. http://www.kom-mersant.ru/.
12. * Rossiyskaya Gazeta – Russian state newspaper. http://www.rg.ru/.
VI. Annexes 75
7. QUALITY CONSULTANTS AND CERTIFICATION ORGANIZATIONS
1. Prioritet. Quality management system improvement consulting. General Di-rector: Vadim Lapidus. Address: 22, Nizhegorodskaya Str., Nizhny Novgorod, 603109, Russia; Tel. 7-8312-34-27-77; Fax. 7-8312-30-06-77; http://www.cen-terprioritet.ru/; [email protected].
2. Synchron-Q. Quality management system improvement consulting. General Director: Scott Bennett. Moscow Office: 8-102, Ostashkovsky Proezd, Moscow, 129345, Russia; Tel. 7-095-258-02-81; Fax. 7-095-185-44-64; Office in Saint-Pe-tersburg: 63, Zhukovskogo Street, Saint-Petersburg, 193036, Russia; Tel. 7-812-346-73-27; Fax. 7-812-346-73-29; [email protected], [email protected].
3. Conflux. Quality management system improvement consulting. General Direc-tor: Vladimir Matsuta. Address: Office 410, 7, Vvedensky kanal, Saint-Peters-burg, 192212, Russia. Tel. 7-812-326-45-71; Fax. 7-812-105-30-03; www.conflux.spb.ru; [email protected].
4. Russian Engineering Academy, Volga Department. Quality management system improvement consulting. General Director: Yuri Mikheev. 3A, Studenchesky per., Samara, 443001, Russia. Tel. 7-8462-42-04-39; Fax. 7-8462-32-22-17; http://www.poria.ru; [email protected].
5. Intersertifika. Quality management system improvement consulting and ISO Certifications. Executive Director: Sergey Andreev. 55, Architektora Vlasova Street, Moscow, 117393, Russia. Tel. 7-095-128-78-80; Fax. 7-095- 784-64-50; http://www.icgrp.ru; [email protected].
6. Certification Association “Russian Register”. Assessment and certification of quality management systems. General Director: Arkadiy Vladimirtsev; 28, lit.A, Moiseenko str., 193124, Saint-Petersburg, Russia. Tel. 7-812-380-19-89, 7-812-380-19-90. Fax: (812) 380-19-91; http://www.rusregister.ru/; [email protected].
7. TEST-St. Petersburg Co. Ltd. Center for testing and certification. 1, Kurlyand-skaya Street, St.-Petersburg, 190103, Russia. Tel. 7-812-251-39-50; Fax. 7-812-251-41-08; http://www.rustest.spb.ru; [email protected].
8. BIG-SPb. Quality consulting and its practical implementation. 2, 9-ya Sovetskaya Street, Saint-Petersburg, 191014, Russia. Tel. 7-812-278-98-55; Fax. 7-812-274-90-53; http://big.spb.ru/; [email protected].
9. Proxy. IT Outsourcing and Consulting. Quality management system improve-ment consulting. Managing partner: Christoph Richter; 160 Schwanthaler Strasse, Munich, 80339, Germany. Tel. 49 (0) 89/50-09-43-26; Fax. 49 (0) 89/50-09-43-27; www.proxyitc.com; [email protected]
Finding Quality Partners: A Review Of The Russian Automotive Component Sector76
8. RUSSIAN INTERNET SEARCH ENGINES 1. www.rambler.ru2. www.aport.ru3. www.yandex.ru4. www.google.ru5. www.aport.ru6. www.metabot.ru
9. GENERAL
1. US Library of Congress Russia Country Study. lcweb2.loc.gov/frd/cs/rutoc.html.
2. Internet source of data on over 260 countries. www.countryreports.org/russia.htm.
3. A clickable map of Russia. atlasgeo.span.ch/fotw/flags/geo-ru.html. 4. Russian regional database. www.cspp.strath.ac.uk/catalog11_0.html.5. Links to Russian newspapers. http://www.onlinenewspapers.com/russia.
htm.
Annex 4. Sources for the Primary List of Companies
• List of participants of the exhibition of the 1st International Specialized Exhi-bition “AutoComponents. New technologies” that took place in the Moscow “Manezh Exhibition Center”, in April, 2003 (http://global-expo.ru; Tel: +7 095 107 31 90, +7 095 107 39 37).
• Electronic database – business directory of companies in the automotive in-dustry (http://www.asuimp.ru; [email protected]; Tel: +7 095 562 40 13; Mihail Birulin, sales manager).
• List of members of the Russian National Association of Automotive Component Producers – NAPAK (www.napak.ru; Tel: +7 095 974 87 72).
• Database of clients of quality management consultant “Prioritet”(http://www.centerprioritet.ru; Tel: +7 8312 31 31 35).
• List of clients of the “Intercertifika”, a Russian quality management consulting firm (http://www.icgrp.ru; Tel: +7 095 784 64 54).
VI. Annexes 77
Name of the company ________________________________________________
Contact information _______________________________________________ (address, telephone, fax, e-mail)
1. Is the company currently investing in quality management improvement?
Yes No
2. Does the company hold any certifi cates on international quality standards ISO-9000, QS-9000, ISO/TQ 16949, other?
Yes No
If yes, please specify which ____________________________________________ Date and place of issuance and expiration date; _____________________________ If no, is the company planning то get certifi ed Please specify the certifi cate and planned date of certifi cation _______________
3. Please name quality management improvement methods, used at the factory
Internal education programs, training and seminars (please specify the person responsible for this Activity: Quality Director, Human Resource Director, other)
External consultants (Please specify the name)
Other (please specify)
4. Is the company interested in foreign partners to develop joint production?
Yes No
5. How long has the company existed on the market?
Less than 3 years Over 3 years
6. What is the company’s specialization on the market: type of the automotive component ___________________________________________
7. Number of the working staff at the company is equivalent to:
< 100 100-500 > 500
Annex 5. Questionnaire 1
CREATION OF A DATABASE OF RUSSIAN AUTOMOTIVE SUPPLIERS —POTENTIAL PARTNERS FOR FOREIGN INVESTORS.
QUESTIONNAIRE FOR POTENTIAL PARTNERS
Finding Quality Partners: A Review Of The Russian Automotive Component Sector78
Name of the company ________________________________________________
Contact information _______________________________________________ (address, telephone, fax, e-mail)
1. Has the company been showing stable growth in production and sales volume for the last 3 yeas.
Yes No
If yes, the growth rate (% per annum) is: ________________________ Absolute Change (in USD)
2. Has the company been profi table for the last 3 years If yes, the growth rate (% per annum) is:
Yes No
3. Is the company currently supplying to leading automakers in Russia. If yes, please name which:
Yes No
AvtoVAZ IzhMash-Avto GAZ UAZ GM-АvtoVAZ Other auto makers
5. Is the company currently working with any foreign partner?If yes, please specify its name
Yes No
6. Is the company a start-up or a new privatized (when if so please underline a matching answer).
Annex 6. Questionnaire 2
QUESTIONNAIRE FOR THE POTENTIAL PARTNERSECOND ROUND FOR 50 COMPANIES SELECTED
AFTER THE FIRST QUESTIONNAIRE
VI. Annexes 79
Annex 7. Prioritizing the Companies
1. The IFC team began with a combined list of over 300 companies in the automotive industry. It was assembled from various sources listed in annex 4.
2. The team then narrowed the initial list by removing companies:• in the tractor, bus and truck segments;• located outside Russia;• which are already JVs with international companies;�This resulted in a “long list” with total of 236 companies;
3. The team then defined criteria to choose companies for a short list and distributed a questionnaire to all 236 companies. (See annex 3 for a copy of the questionnaire);
In general the team decided that whereas financial, technology and equipment improve-ments can be made relatively quickly, quality management system improvements take the most time. Therefore the questionnaire addressed the following factors considered significant in potential partners:
• Quality Management System Certificates;• Plans to improve the quality management system;• Investments made in quality management system improvement;• Companies more than 3 years old;• Companies with more than 100 employees;• Companies interested in working with international partners;
4. Based on the responses to the questionnaire the team found 54 companies match-ing the criteria. Then IFC team sent out another questionnaire to these 54 companies in order to determine a shorter list, final of companies for more detailed study and visits. (see annex 4 for the second questionnaire and the weights assigned to all the factors.)
5. Having ranked all companies by each factor and calculated their weighted average33
21 companies were selected for a ‘final list’.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector80
Filtering factor Points Description
Quality Certifi cates
5 ISO 9001 from well-known certifi cation fi rm
4 ISO 9001 from little known fi rm
3 ISO 9001 expired/old version
Quality Consulting
5 Both internal training and external consulting used
4 External consultants invited only
3 Internal training only
Production Growth
5 Production growth
4 Stable
3 Decrease
0 Information refused
Financial Stability
5 Growth in sales/profi ts
4 Stable sales/profi ts
3 Decrease in sales/profi ts
0 Information refused
Supplies to Russian OEMs
5 Yes
1 No
0 No response
Former Soviet or Start up
5 Start up, new company
3 Former Soviet, privatized
0 No response
Work with foreign partners
5 Current work (including imports)
1 No current connections
0 No response
Export Experience
5 Current exporter
1 No export experience
0 No response
Annex 8. Selecion Criteria: Ranking Scores.
VI. Annexes 81
Filt
erin
g F
acto
rR
esp
on
ses
Ran
k (0
-5)
Wei
gh
t (0-
100%
)Ex
pla
nat
ion
Qu
alit
y C
erti
fi ca
tes
30%
Qua
lity
is th
e nu
mb
er o
ne fa
ctor
for
sele
ctio
n
ISO
900
1 fr
om w
ell k
now
n fi r
m5
ISO
900
1 fr
om li
ttle
kno
wn
fi rm
4
ISO
900
1 ex
pire
d/ol
d ve
rsio
n3
Qu
alit
y C
on
sult
ing
40%
It is
har
der a
nd ta
kes
mor
e tim
e to
im
pro
ve th
e qu
alit
y m
anag
emen
t sy
stem
of t
he c
omp
any
than
to b
uy n
ew
mac
hine
s or
lear
n ne
w te
chno
logy
.
Exte
rnal
and
inte
rnal
con
sult
ing
5
Exte
rnal
onl
y4
Inte
rnal
con
sult
ing
3
Pro
du
ctio
n g
row
th
5%
Prod
uctio
n gr
owth
5
Stab
le4
Dec
reas
e3
Info
rmat
ion
refu
sed
0
Fin
anci
al g
row
th
5%
Fina
ncia
l inf
orm
atio
n co
llect
ed b
y te
lep
hone
sur
vey
may
be
unre
liab
le.
Com
pan
ies
are
less
op
en a
bou
t thi
s in
form
atio
n.
Gro
wth
in s
ales
/pro
fi ts
5
Stab
le s
ales
/pro
fi ts
4
Dec
reas
e in
sal
es/p
rofi t
s3
Info
rmat
ion
refu
sed
0
An
ne
x 9
. Se
lect
ion
Cri
teri
a: W
eig
hts
.
Finding Quality Partners: A Review Of The Russian Automotive Component Sector82
Sup
ply
ing
to R
uss
ian
O
EMs
5%Im
por
tant
fact
ors,
but
not
as
criti
cal
as th
e Q
ualit
y is
sue.
Yes
5
No
1
No
resp
onse
0
Form
er S
ovie
to
r St
art u
p
5%St
art u
p, n
ew c
omp
any
5
Form
er S
ovie
t, p
rivat
ized
3
No
resp
onse
0
Wo
rk w
ith
fore
ign
p
artn
ers
5%
Cur
rent
wor
k (in
clud
ing
imp
orts
)5
No
curr
ent c
onne
ctio
ns1
No
resp
onse
0
Exp
ort
exp
erie
nce
5%C
urre
nt e
xpor
ter
5
No
exp
ort e
xper
ienc
e1
No
resp
onse
0
Sum
=10
0%
VI. Annexes 83A
nn
ex
10
. Lis
t o
f 5
4 C
om
pa
nie
s (A
lph
ab
eti
cal O
rde
r)
#C
om
pan
yC
om
po
nen
tLo
cati
on
Co
nta
ct in
form
atio
n
1A
rzam
ass
fact
ory
of
radi
opar
ts, О
АО
Resi
stor
s, re
sist
or b
ased
se
nsor
s, s
witc
hes,
Par
ts
for e
ngin
es (e
ngin
e b
elt
tens
ion
mec
hani
sm)
9 “a
”, Vi
ctor
y st
r., A
rzam
as,
Niz
hego
rods
kaya
regi
on, 6
0722
0; T
el.:
(831
47) 4
-188
5; F
ax: (
8314
7) 4
-184
2
Gen
eral
dire
ctor
— V
alen
tin V
icto
rovi
ch
Kost
in; F
inan
ce &
eco
nom
y di
rect
or —
Iv
an Iv
anov
ich
Spiri
n; M
arke
ting
& s
ales
di
rect
or —
And
rey
Vasi
lyev
ich
Shp
erlin
g
2A
vtoe
lect
roni
ka,
OA
OM
icro
pro
cess
or
tran
smis
sion
man
agem
ent
syst
ems,
pre
ssur
e re
gula
tors
, eng
ine
man
agem
ent u
nits
18, A
zhar
ovsk
aya
str.,
Kal
uga,
248
631;
Te
l.: +
7 (0
842)
55-
00-2
4; e
-mai
l: ae
@ae
.ru
; htt
p://
ww
w.a
e.ru
Gen
eral
dire
ctor
— A
ndre
y Vi
leno
vich
Pe
rchy
an; F
inan
ce a
nd e
cono
my
dire
ctor
— N
icko
lay
Vlad
imiro
vich
Tur
ov;
Qua
lity
dire
ctor
— V
enia
min
Vas
ilyev
ich
Irin
arck
ov
3A
vtoa
greg
at, О
АО
clut
ch s
yste
m, s
usp
ensi
on
syst
em, w
heel
s an
d hu
bs,
b
raki
ng s
yste
m, d
oor l
ocks
an
d ig
nitio
n sy
stem
.
2 Sh
uisk
aya
st.,
1, K
ines
hma,
Ivan
ovo
regi
on, R
ussi
a, 1
5580
0; T
el.:
+7
(093
31)
5-76
-07;
5-7
4-57
; Fax
: +7
(093
31) 2
-07-
65; Е
-Mai
l: ro
ot@
kine
shm
a.ru
; htt
p://
ww
w.k
ines
hma.
ru
Gen
eral
Dire
ctor
— V
aler
i Ard
alyo
novi
tch
Smys
hlya
ev; Q
ualit
y D
irect
or —
Vy
ache
slav
Ana
toly
evitc
h Sm
irnov
; Firs
t D
eput
y G
ener
al D
irect
or, M
arke
ting
D
irect
or -V
icto
r Ale
xand
rovi
tch
Dog
adki
n
4A
vtoa
rmat
ura,
OA
O
Car
ant
enna
s sw
itche
s,
igni
tion
lock
s an
d ot
her
elec
tric
al a
nd p
last
ic
com
pon
ents
21, S
alov
a st
r., 1
9210
2, S
aint
-Pe
ters
bur
g , R
ussi
a; T
el.:
+7
(812
) 112
-88
-73;
aap
lant
@ro
l.ru
Gen
eral
dire
ctor
- Ale
xand
er M
ihai
lovi
ch
Tkac
henk
o;
Dep
uty
gene
ral d
irect
or —
Ale
xand
er
Evge
nevi
ch; D
udar
ev
5A
vtoc
entr
, ОО
ОA
ccum
ulat
ors
9, S
arm
engo
vay
str.,
Ivan
ovo,
153
005;
. Te
l.: +
7 (0
932)
37-
12-4
2; F
ax: (
0932
) 37
-16-
07
Gen
eral
dire
ctor
— A
nato
ly L
eoni
dovi
ch
Sara
tov
6A
vtoe
lekt
roar
mat
ura
(Ava
r), O
AO
Oil
pre
ssur
e se
nsor
s, fu
el
leve
l sen
sors
10
8, S
ovet
skay
a st
r., P
skov
; Tel
./Fax
: +7
(811
2) 1
6-07
-97,
16-
16-2
0 G
ener
al D
irect
or –
Pav
el P
avlo
vich
M
elni
kov;
Chi
ef o
f mar
ketin
g de
par
tmen
t —
And
rey
Soko
lov
7A
vtok
ople
kt, O
AO
Aut
omot
ive
elec
tron
ics
1 “a
”, Si
rtla
novo
y st
r., B
eleb
ey,
Bash
kort
osta
n Re
pub
lic; T
el: +
7 (3
4716
) 44
640
Gen
eral
dire
ctor
— A
lexa
nder
Ale
xeev
ich
Soro
kin;
Tech
nica
l Con
trol
ler —
Olg
a A
leks
eevn
a Ry
akin
a
Finding Quality Partners: A Review Of The Russian Automotive Component Sector84
8A
vtoP
ribor
Fac
tory
, OA
OIn
stru
men
t clu
ster
s,
ther
mos
tats
, sp
eedo
met
ers,
ta
chom
eter
s, w
inds
hiel
d w
iper
s, s
enso
rs, r
elay
s,
othe
r ele
ctric
al
79, B
olsh
aya
Niz
hego
rods
kay
str.,
Vl
aim
ir 60
0016
; Te
l.: +
7 (0
922)
21-
05-8
2, F
ax: +
7 (0
922)
29
-71-
16
Gen
eral
dire
ctor
— A
leks
ey
Ale
ksan
drov
ich
Mel
niko
v; Q
ualit
y di
rect
or —
Edw
ard
Geo
rgie
vich
Rai
ter
9A
vtot
echi
nca,
OO
O
Floo
rs, c
eilin
gs, t
runk
co
verin
gs a
nd s
ound
in
sula
tion
pan
els
6 Tr
avya
naya
St.,
Niz
hny
Nov
goro
d,
6030
37, R
ussi
a; T
el.:
+7
(812
) 23-
12-4
3,
Fax:
+7
(831
2) 2
3-12
-98
Gen
eral
dire
ctor
— S
erge
y M
ihai
lovi
ch
Kono
valo
v
10A
vtoz
hgut
, ZA
OBr
ushe
s fo
r ele
ctric
de
vice
s an
d w
ires
for
igni
tion
syst
ems
9 b,
Lom
onos
ova
str.,
Niz
hniy
N
ovgo
rod,
603
105;
Tel
./Fax
: +7
(831
2) 7
8-45
-96;
zav
od@
avto
zgut
.ru;
avto
zgut
@si
nn.ru
Gen
eral
dire
ctor
— A
ndre
y A
leks
andr
ovic
h G
aran
in.
11Ba
lock
ovor
ezin
otec
hnik
aО
АО
Rub
ber
par
ts, s
leev
es,
soun
d is
olat
ing
par
tsIn
dust
rial z
one,
Bal
akov
o-16
, Sa
rato
vska
ya re
gion
; Tel
.: +
7 (8
453)
9-
68-6
9; F
ax: 2
-20-
20
Gen
eral
dire
ctor
— E
vgen
y Se
men
ovic
h Ef
rem
ov; P
rodu
ctio
n an
d m
arke
ting
dire
ctor
— A
lexa
nder
D
mitr
ievi
ch A
ntos
hin
12Ba
tmas
ter-
dise
l, O
OO
Inte
rnal
-com
bus
tion
engi
nes,
pis
tons
for
Inte
rnal
-com
bus
tion
en
gine
s
39-2
2, P
ocht
ovay
a st
r.,
Soln
echn
ogor
sk, M
osco
w R
egio
n; T
el.:
(095
) 109
-00-
28
Gen
eral
dire
ctor
— A
lexa
ndra
Va
sile
vna
Kriv
chuk
13Be
arin
g Fa
ctor
y №
10,
OA
O
Bear
ings
, pis
ton
rings
1, P
esko
va s
tr.,
Rost
ov o
n do
n; T
el.:
+7
(863
2) 2
2-56
-72
Gen
eral
dire
ctor
— G
eorg
iy
Ale
xand
rovi
ch M
elni
k;Q
ualit
y di
rect
or —
Ana
toliy
Ya
kovl
evic
h Ig
nato
v
14Be
tar,
OO
O
Wat
er a
nd g
as m
eter
s12
7 En
gels
Str
eet,
Chi
stop
ol, T
atar
stan
, 42
298,
Rus
sia;
Tel
.: 7
(843
42) 9
4- 6
-73.
Gen
eral
dire
ctor
— R
inat
Far
deev
15C
itron
, Aut
ocom
pon
ents
fa
ctor
y, O
AO
Su
spen
sion
s23
4, O
ktyb
rska
y St
r., S
tavr
opol
sky
Regi
on; S
hpak
ovsk
oe v
iilag
e; T
el.:
+7
(865
53) 5
-21-
53
Gen
eral
dire
ctor
— A
lexe
y Va
sile
vich
Po
licka
rpov
; Qua
lity
dire
ctor
— U
riy
Petr
ovic
h Ki
riche
ck
VI. Annexes 8516
Det
alst
royk
onst
rukt
siya
(D
SK),
OO
OFu
el ta
nks,
car
pet
ing,
w
indo
w ra
iser
s,
mis
cella
neou
s co
mp
onen
ts
Indu
stria
l Par
k on
Avt
oVA
Z te
rrito
ry,
Togl
iatt
i, Sa
mar
a re
gion
, 445
026,
Ru
ssia
Gen
eral
Dire
ctor
: Ale
ksey
Ivan
ovic
h Zv
erev
;Te
chni
cal D
irect
or: V
ladi
mir
Petr
ovic
h M
asle
nnik
ov
17D
imitr
ovog
rad
Aut
omot
ive
Equi
pm
ent
fact
ory
, OA
O
Car
bod
y fi t
tings
; ele
ctric
al
equi
pm
ent;
78, A
vtos
troi
tele
y st
r., U
lyan
ovsk
aya
regi
on, D
imitr
ovgr
ad; T
el.:
+7
(842
35)
5-25
-62,
5-2
1-71
; ww
w.d
aaz.
ru
Gen
eral
dire
ctor
— V
icto
r Pav
lovi
ch
Pote
mki
n; D
eput
y ge
nera
l dire
ctor
of
qual
ity
— B
oris
Yak
ovle
vich
Sur
ilov;
D
eput
y di
rect
or o
f com
mer
ce —
D
mitr
y Vl
adim
irivo
ch P
anch
enko
v
18Eg
orie
vsky
Fac
tory
fo
r Asb
esto
s te
chni
cal
par
ts, О
АО
Brak
e lin
ings
, com
pre
ssor
s In
dust
rial z
one,
Ega
orev
sk, M
osco
w
regi
on; T
el.:
+7
(096
40) 5
-08-
71
Gen
eral
Dire
ctor
–Ig
or M
ihai
lovi
ch
Aks
enov
;D
eput
y Q
ualit
y D
irect
or o
n —
A
lexa
nder
Dm
itrye
vich
Oku
lov;
M
arke
ting
Dire
ctor
— V
aler
y Vi
ctor
ovic
h G
leb
ov
19El
abug
a C
ar F
acto
ry, P
O,
GU
P* M
otor
s fo
r air-
cond
ition
ing,
w
inds
hiel
d w
iper
s, s
witc
hes
2, T
anae
vsko
e hi
ghw
ay, E
lab
uga,
Ta
tars
tan
Rep
ublic
; Tel
.: +
7 (8
5557
) 5-
10-0
3, F
ax.:
+7
(855
57) 5
-10-
90;
ww
w.e
laz.
ru
Gen
eral
dire
ctor
— R
avil
Ham
atov
ich
Zarip
ov;
Qua
lity
dire
ctor
— G
akil
Mau
lem
ber
diev
ich
Nur
muh
amet
ov
20El
ara,
ОА
ОIg
nitio
n sy
stem
s; c
limat
e co
ntro
l sys
tem
s; s
igna
l and
co
ntro
l sys
tem
s
40, M
osko
vski
y av
enue
, Che
bok
sary
C
huva
shia
; Tel
.: +
7 (8
352)
49-
10-6
3 w
ww
.ela
ra.ru
Gen
eral
dire
ctor
— G
leb
And
reev
ich
Ilenk
o;
Dep
uty
dire
ctor
of q
ualli
ty —
Alla
A
lexe
evna
; Rac
kova
; Dire
ctor
of
Aut
omot
ive
Busi
ness
: Ana
toly
N
ikol
aevi
ch D
anilo
v
21El
ektr
osve
t, PО
ОО
ОW
iring
126,
Ord
zhen
ikig
ze s
tr.,
Rost
ovsk
a; te
l.:
+7
(863
54) 3
-21-
80G
ener
al d
irect
or —
Yur
i A
lexa
ndro
vich
Pac
hom
ov;
Dep
uty
dire
ctor
on
qual
ity
— Ig
or
Vlad
imiro
vich
Efi m
enko
22El
tra,
OA
OSt
arte
rs, h
eate
rs
42, Z
ubco
vsko
e hi
ghw
ay, R
zhev
, Tv
ersk
aya
regi
on; T
el.:
+7
(082
32) 2
-10-
35; 2
05
85
Gen
eral
Dire
ctor
- Vla
dim
ir Va
lerie
vich
Le
nsky
; Mar
ketin
g di
rect
or —
Olg
a A
nato
lyev
na R
ibki
na*
PO
– P
rod
uct
ion
Un
ion
; GU
P –
Sta
te O
wn
ed E
nte
rpri
se;
Finding Quality Partners: A Review Of The Russian Automotive Component Sector86
23En
ergo
tech
mas
h,
OA
OA
utom
ated
inst
rum
ents
an
d de
vice
s fo
r te
mp
erat
ure
pre
ssur
e co
ntro
l
40, M
orkv
ashi
nska
ya s
tr.,
Zhig
ulev
sk,
Sam
arsk
aya
regi
on; T
el.:
+7
(848
62)
6-15
-84;
htt
p://
etm
.vol
ga.ru
Gen
eral
Dire
ctor
— S
erge
y N
icko
laev
ich
Ogr
in;
Mar
ketin
g &
dev
elop
men
t dire
ctor
—
Yuri
Vasi
lyev
ich
Cho
vrin
; Dire
ctor
on
fi nan
ce —
Ole
g A
nato
lyev
ich
Pavl
ov
24In
terc
os-IV
, ZA
OA
utom
otiv
e b
ody
pan
el
dies
, oth
er to
olin
g fo
r lar
ge-
size
d st
amp
ing,
Sta
mp
ings
fo
r aut
omot
ive
and
othe
r in
dust
ries
25 A
Bol
shoy
Pr.
P.S,
Sai
nt-P
eter
sbur
g,
1971
98; T
el: +
7 (8
12) 2
32-1
4-76
; Fax
: +7
(812
) 232
-46-
79; w
ww
.inte
rcos
-iv.ru
Man
agin
g D
irect
or —
Tim
ur B
oris
ovic
h Sh
osht
aev
— ts
hosh
taev
@in
terc
os-iv
.ru
25A
vism
a Ti
tani
um-
Mag
nesi
um W
orks
,ZA
O
Mag
nesi
um-b
ased
par
ts fo
r th
e au
tom
otiv
e in
dust
ry
Bere
znik
i, Pe
rm re
gion
, 618
421
Russ
ia
Tel:
+7
(342
42) 9
3666
, 935
50; F
ax:
+7
(342
42) 9
3999
, 411
11; E
-mai
l: av
ism
a@av
ism
a.ru
Gen
eral
dire
ctor
— V
yach
esla
v Te
tyuk
hin;
Qua
lity
& C
ertifi
cat
ion
Dire
ctor
— S
erge
i O
vchi
nnik
ov; D
irect
or o
n Te
chno
logy
, Sc
ienc
e &
Dev
elop
men
t — V
ikto
r Ku
rnos
enko
26Ka
luga
Pla
nt o
f A
utom
otiv
e El
ectr
ical
Eq
uip
men
t (KP
AE)
,O
AO
Elec
tric
al e
quip
men
t18
, Aza
rovs
kaya
str
., Ka
luga
; Tel
./ Fa
x:
+7
(084
2) 5
3-10
-44,
55-
05-7
5G
ener
al d
irect
or —
Ana
toli
Nau
mov
ich
Faer
ovic
h; F
irst d
eput
y ge
nera
l di
rect
or —
Ser
gey
Vasi
lyev
ich
Yash
enko
; C
hief
eng
inee
r — N
icko
lay
Vasi
lyev
ich
Kole
snik
ov
27Ku
rsk
bea
ring
com
pan
y, Z
AO
Engi
ne B
earin
gs
23A
, Agr
egat
naya
Str
., Ku
rsk,
Te
l.: +
7 (0
7122
) 60-
0-40
; offi
ce@
kpk.
kurs
k.ru
Gen
eral
Dire
ctor
— L
eoni
d Ed
uard
ovic
h Ro
gale
vich
; Com
mer
cial
man
ager
—
Vasi
li Va
lent
inov
ich
Kvas
nick
ov; Q
ualit
y di
rect
or —
Ivan
Pav
lovi
ch S
umak
ov
28Le
pse
, ОА
ОSw
itche
s, s
enso
rs,
cont
acto
rs, a
utom
atio
n sy
stem
s
24, O
ktyb
rsky
ave
nue,
Kiro
v; T
el.:
+7
(833
2) 2
3-23
-10
Gen
eral
Dire
ctor
— G
enna
dy
Ale
xand
rovi
ch M
amae
v; P
rodu
ctio
n di
rect
or —
Vic
tor V
asile
vich
Bra
tuki
n;
Tech
nica
l dire
ctor
— V
yach
esla
v G
enad
yevi
ch K
osol
apov
VI. Annexes 8729
Mot
orde
tal,
ОА
О
Gas
olin
e en
gine
s, e
ngin
e b
earin
gs10
5, M
osko
vska
y st
r., K
ostr
oma,
15
6604
; Tel
.: +
7 (0
942)
53-
27-4
1, 5
3-22
-11
; Fax
: +7
(094
2) 5
3-09
-62;
E-
mai
l: m
otor
cpg@
kosn
et.ru
; htt
p://
ww
w.m
otor
deta
l.ru
Gen
eral
dire
ctor
— U
riy E
ngel
sovi
ch
Elis
eev;
Dire
ctor
on
mar
ketin
g —
Mic
hail
Mic
kailo
vich
Mih
alev
; Sal
es d
irect
or —
Se
rgey
Vik
toro
vich
Kal
ashn
ik
30O
rleks
, ZА
ОTh
erm
osta
ts
6, L
omon
osov
a st
r., O
rel 4
1003
7; T
el/
Fax
+7
(086
2) 4
1-62
-36
Gen
eral
Dire
ctor
— N
icko
lay
Nic
kola
evic
h Ko
stin
; Firs
t dep
uty
gene
ral
dire
ctor
, fi n
ance
dire
ctor
— A
ndre
y N
icko
laev
ich
Kost
in; D
irect
or o
f de
velo
pm
ent a
nd te
chno
logy
— c
hief
en
gine
er —
Ale
xand
er E
vgen
yevi
ch
Zaic
hev
31O
svar
, OA
OA
utom
otiv
e lig
htin
g;
inte
rnal
hea
dlig
hts,
bra
king
lig
hts
13 Z
hele
znod
oroz
hnay
a St
., Vy
azni
ki,
6014
46, V
ladi
mir
Regi
on; T
el: +
7 (0
9233
) 23-
1-95
; ww
w.s
ok.ru
Gen
aral
dire
ctor
— V
ladi
mir
Elp
idifo
rovi
ch S
azhi
n;Q
ualit
y D
irect
or —
Vla
dim
ir Se
myo
nov
32Pl
astic
, ZА
О
Clu
tch,
sus
pen
sion
, ste
erin
g lin
kage
s, s
teer
ing
cont
rol
elem
ents
, bra
king
sys
tem
s
11, R
adon
ezhs
kaya
str
., C
hely
abin
sk;
Tel.:
+7
(351
2) 9
8-97
-31;
Fax
: +7
(351
2)
93-1
7-28
; tec
hdir@
ap-p
last
ic.ru
; m
arke
t@ap
-pla
stic
.ru;
ww
w.a
p-p
last
ic.ru
Gen
eral
Dire
ctor
– V
yach
esla
v D
anie
vich
G
ersh
man
; Tec
hnic
al M
anag
ers
—
Tel.:
(351
2) 9
8-33
-48;
M
arke
ting
dep
artm
ent —
Tel
.:(35
12)
93-3
5-94
33Po
limer
stro
imat
eria
ly,
OA
OTr
unk
rugs
, fl o
or m
ats
Prom
zona
, Otr
adny
; Sam
ara
Regi
on,
4463
00, R
ussi
a; T
el: +
7 (8
4661
) 23-
0-15
Gen
eral
dire
ctor
— V
ladi
mir
Ivan
ovic
h Ki
sile
nko
34Pr
amo,
OO
O
Star
ters
, gen
erat
ors,
ra
diat
ors,
hea
ters
21
, Ele
ctro
zavo
dska
ya s
tr.,
Mos
cow
; Te
l.: +
7 (0
95) 9
95-2
5-10
; w
ww
.pra
mo.
ru
Gen
eral
Dire
ctor
– S
erge
y N
ikol
aevi
ch
Smirn
ov
35Sa
mar
a C
able
C
omp
any,
ZA
OC
able
s, c
ar w
iring
9, K
abel
naya
St.,
Sam
ara,
443
022,
Ru
ssia
; Tel
: +7
(846
2) 2
8-22
-40
Gen
eral
Dire
ctor
: Val
ery
Fedo
rovi
ch
Kluc
hnik
ov;
Dire
ctor
for D
evel
opm
ent:
Vyac
hesl
av
Rodi
onov
36Sa
mar
aavt
ozhg
ut,
OO
OA
uto
wiri
ng a
ssem
blie
s,
win
dshi
eld
was
her s
yste
ms,
do
or lo
ck w
iring
11 D
zerz
hins
kogo
St.,
Sa
mar
a, 4
4309
3, R
ussi
a;
Tel:
+7
(846
2) 6
6-90
-07
Gen
eral
Dire
ctor
— A
lexa
nder
Ko
nsta
ntin
ovic
h D
orof
eev;
Tec
hnic
al
Dire
ctor
— V
ladi
mir
Kire
ev
Finding Quality Partners: A Review Of The Russian Automotive Component Sector88
37Sa
rato
v b
earin
g fa
ctor
y, О
АО
Bear
ings
, bal
ls a
nd ro
llers
fo
r bea
rings
64 a
, Ent
uzia
stov
ave
nue,
Sar
atov
; Tel
.: +
7 (8
452)
99-
29-6
2, 9
9-29
-55,
; Fax
: (8
452)
92-
08-4
4;
http
://w
ww
.spz
.ru; i
nfo@
spz.
ru
Gen
eral
dire
ctor
— A
nato
ly M
icka
ilovi
ch
Stec
kov;
Hea
d of
info
rmat
ion
& a
naly
tical
de
par
tmen
t — D
mitr
y A
lexe
evic
h Si
tyag
in
38So
ate,
ZА
ОA
utoe
lect
onic
s; in
ject
ion
syst
ems,
igni
tion
syst
ems
54, V
atut
ina
str.,
Sta
ry O
skol
, Be
lgor
odsk
ay re
gion
; Te
l.: +
7 (0
725)
22-
46-6
7
Gen
eral
Dire
ctor
— A
nato
ly M
icha
ilovi
ch
Mam
onov
; Dep
uty
gene
ral d
irect
or —
A
ndre
y Iv
anov
ich
Bolk
ovoy
; Dep
uty
dire
ctor
on
qual
ity
— E
lena
Ivan
ovna
La
guno
va
39So
teks
, ZA
O, N
PPo
lyur
etha
ne fo
am a
nd
pla
stic
par
ts5
Shuv
alov
sky
Proe
zd, N
izhn
y N
ovgo
rod,
603
095,
Rus
sia;
Tel
: +7
(831
2)
98-0
4-08
; Fax
: +7
(831
2) 9
8-04
-37;
w
ww
.sot
eks.
nnov
.ru
Gen
eral
Dire
ctor
: Val
ery
Ado
lfovi
ch
Batm
anov
, H
ead
of th
e A
utom
otiv
e D
ivis
ion:
Lev
G
enna
diev
ich
Ale
ksee
v
40St
art,
PО
Aut
omot
ive
wiri
ng
11, D
zher
gins
kogo
str
., Sa
mar
a;
Tel.:
+7
(846
2) 6
6-44
-77
Gen
eral
Dire
ctor
— A
lexa
nder
Ko
nsta
ntin
ovic
h D
orof
eev;
Dire
ctor
of
fi nan
ce —
Ilya
Evg
enev
ich
Mile
hin
41Te
plo
obm
enni
k,
pro
duct
ion-
desi
gn
unio
n, О
АО
Radi
ator
s, re
frig
eran
ts
(coo
ling
syst
ems)
, hea
ters
93
, Len
ina
aven
ue, N
izhn
iy N
ovgo
rod;
Te
l.: +
7 (8
312)
58-
27-9
0; F
ax.:
(831
2)
53-1
7-76
; (83
12) 5
3-09
-96;
ht
tp://
ww
w.te
plo
obm
enni
k.ru
Gen
eral
dire
ctor
— V
icto
r Vic
toro
vich
Ty
atin
kin;
Dep
uty
dire
ctor
on
qual
ity
—
Boris
Mic
hailo
vich
Kuz
min
42To
pliv
nye
Sist
emy,
O
OO
Fu
el in
ject
ion
syst
em
elem
ents
, coo
ling
syst
ems
pum
ps,
ele
ctro
mag
netic
va
lves
, gas
olin
e p
ump
s,
carb
uret
ors
5, S
amoy
lovo
y St
r., S
ain-
Pete
rsb
urg;
Te
l: +
7 (8
12) 1
66-7
2-37
; m
arke
t@to
psy
s.sp
b.ru
Gen
eral
dire
ctor
— M
icha
il Ig
orev
ich
Maz
urov
; Com
mer
cial
man
ager
—
Mic
kail
Tim
urov
ich
Klim
enko
; Qua
lity
dire
ctor
— N
icko
lay
Ale
xand
rovi
ch
Sugr
ey
43Tr
ek, Z
AO
Con
stan
t vel
ocit
y Jo
ints
(CV
Join
ts),
tie ro
ds, s
prin
gs,
and
shoc
k ab
sorb
ers
31 G
otva
ld s
tr, M
iass
, 456
306
Che
liab
insk
regi
on, R
ussi
a; T
el: +
7 (3
5135
) 760
-75-
31
Gen
eral
Dire
ctor
— A
ndre
y N
ikol
aevi
ch
Padu
chin
; Dep
uty
Dire
ctor
for H
uman
Re
sour
ces
-Vla
dim
ir Se
men
ov;
Dep
uty
Dire
ctor
for Q
ualit
y —
Evg
eny
Vale
ntin
ovic
h Ko
gan
VI. Annexes 8944
Tub
otec
hnik
a, Н
ПО
Turb
ocom
pre
ssor
s fo
r di
esel
eng
ines
4, Z
avod
skoy
pas
sage
, Mos
kow
regi
onPr
otvi
no;
Tel.:
+7
(096
7) 7
4-49
-03;
Fax
: 71-
71-8
0
Gen
eral
dire
ctor
— V
aler
y N
aum
ovic
h Ka
min
sky;
Qua
lity
dire
ctor
— V
aler
y D
mit
rievi
ch E
gaor
ov
45U
fi msk
y fa
ctor
y fo
r au
tom
obile
eng
ine,
OA
O
Inte
rnal
-com
bus
tion
en
gine
s 2,
Fer
ina
str.,
Ufa
, Bas
hkor
tost
an
rep
ublic
; Tel
.: +
7 (3
472)
38-
58-6
6;
Fax:
(347
2); 3
8-37
-44.
Gen
eral
dire
ctor
— V
aler
y Pa
vlov
ich
Lisu
nov;
Con
trol
ler —
Ale
xand
er
Nik
olae
vich
Kris
tinin
ov
46U
rale
last
otec
hnik
a,
ZАО
Com
pre
ssor
s, ru
bb
er p
arts
7, M
onte
rska
ya s
tr.,
Ekat
erin
bur
g,
6200
85; T
el.:
+7
(343
2) 2
5-02
-82;
Fax
: (3
432)
25-
12-1
1, 2
5-62
-03;
ht
tp://
ww
w.e
last
ika.
ru
Gen
eral
dire
ctor
— Y
uri A
lexa
ndro
vich
G
ritsa
y;C
hief
eng
inee
r — S
tani
slav
Leo
nido
vich
Kr
asav
in;
Prod
uctio
n &
tech
nolo
gy d
irect
or —
Va
lent
ina
Ivan
ovna
Kem
enev
a
47Ve
lkon
t, О
АО
Rub
ber
tech
nica
l par
ts,
switc
hers
16, L
enin
a st
r., K
irovo
— C
hep
eck
Kiro
vska
ya re
gion
; Te
l.: +
7 (8
3361
) 36-
3-15
Gen
eral
dire
ctor
— V
ladi
mir
Serg
eevi
ch
Shes
tako
v; C
ontr
olle
r — V
ladi
mir
Ilyic
h Sp
irin
48Vo
logo
dsky
Bea
ring
Fact
ory,
ZА
ОBe
arin
gs13
, Okr
uzhn
oe h
ighw
ay, V
olog
da,
Fax:
+7
(817
2) 2
1-07
-79,
21-
07-6
6;
okid
@vb
f.ru
Gen
eral
Dire
ctor
– A
lexa
nder
lvan
ovic
h M
elni
kov;
Dep
uty
dire
ctor
on
mar
ketin
g —
Ale
xey
Ale
xand
rovi
ch
Mel
niko
v; D
irect
or o
n fi n
ance
—
Svet
lana
Rus
lano
vna
Skvo
rtso
va
49Vo
ltyr
e, О
АО
Ti
res
3, P
ervo
may
skay
a st
r., V
olzh
skiy
, Vo
lgog
rads
kaya
regi
on; T
el.:
+7
(844
3)
22-7
0-73
; Tel
.: (8
443)
22-
74-4
3
Gen
eral
dire
ctor
— N
icko
lay
Vasi
lyev
ich
Kulin
; Dep
uty
dire
ctor
on
fi nan
ce —
N
adeg
da S
emen
ovna
Bog
dano
va
50Vo
lzhs
krez
inot
echn
ika,
ZA
O
Com
pre
ssor
s, s
hock
-ab
sorb
ers,
rub
ber
co
mp
onen
ts
Che
mic
al c
ente
r, Vo
lzhs
kiy,
Vo
lgog
rads
kay
regi
on; T
el.:
+7
(844
3)
22-3
5-02
; Fax
: 22-
30-6
1; w
ww
.vlz
.ru
Gen
eral
dire
ctor
— S
erge
y Bo
risov
ich
Vicu
lov;
Dire
ctor
of e
cono
mic
s —
Vl
adim
ir Pa
vlov
ich
Nuz
hdin
; Pro
duct
ion
and
com
mer
ce m
anag
er —
Lili
ya
Ana
toly
evna
Mok
eeva
Finding Quality Partners: A Review Of The Russian Automotive Component Sector90
51Vo
lzhs
ky b
earin
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VI. Annexes 91
Annex 11. Protective Tariffs
A new Russian customs law came into effect at the end of 2003, called “Government Decree of 11.11.2003 #681 “On entering amendments to the customs tariff of the Rus-sian Federation on light vehicles”. Table 1 provides the most recent information about these import tariffs on automobiles as of the end of 2003.
In addition to the customs duties on cars imported into Russia, there are other Fed-eral taxes. The main taxes are the Excise Duty and Value Added Tax (VAT) Table 2 represents excise duties on imported cars.
Federal Law of 07.07.2003 #117-FZ “On entering changes to the Second Part of Tax Code of the Russian Federation and some other legislative acts of the Russian Federa-tion” cancelled the sales tax and lowered the VAT by 2% to 18%. The excise-tax for automobiles with engine horsepower between 90 and 150, was increased from 13 to 14 rubles per horsepower. For cars with more than 150 hp. the rate increased from 129 to 142 rubles.
Age of the car Engine capacity (cc) Custom Duty
Under 3 years1800-2300
25 %, but not less than 1.8 Euros/cc2300-3000
3-7 years1800-2300
25 %, but not less 0.55 Euros/cc2300-3000
Over 7 years1800-2300
2.2 Euros/cc2300-3000
Custom Duties on Used Imported Cars Table 1
Excise Duties on Imported CarsTable 2
Engine type Excise Duty
Automobiles with engine power less than or equal to 90 hp 0 Rubles per 1 hp
Automobiles with engine power above 90 hp but not exceeding 150 hp 14 Rubles per 1 hp
Automobiles with engine power exceeding 150 hp 142 Rubles per 1 hp
Finding Quality Partners: A Review Of The Russian Automotive Component Sector92
The examples presented below show show the impact of the tariffs and taxes on the imported cost of a foreign car in Russia. Note that the tax system in Russia is subject to changes and the following was applicable at the end of 2003.
Example 1: Importation of a New Car
Importation of a hypothetical new car with a sales price (CIF price) of $16,000. Vehicle engine size of 120 cubic inches (1,875 cc), with 120 horsepower.
1. Custom Duty. a. 0.15%33 of $16,000 = $24b. 25% of $16,000 = $4,000. For a new car, under 3 years, with engine ca-
pacity 1 875 cc custom tariff = 1,875* 1.4634 = $2,738. As long as $2,738 is less than 25% of the original price, customs tariff would total $4,000.
c. Subtotal: $16,000+$4,000+$24= $20,0242. The excise tax is 120*14 = 1,681 Rubles or $6035. 3. Next step is to calculate VAT for the new price $20,084 at the rate of 18%,
starting January 1, 2004. This amount is $3,615 for total of $23,700.4. Assuming a 5% dealer mark up the car will be priced in Russia at $24,885.
Example 2: Importation of a Used Car
This example shows the cost impact for a hypothetical used car, 8 years old, engine capacity 160 cubic inches (2,500 cc), equivalent to 160 hp and purchased for $3,000 for export to Russia.
1. Custom Duty. a. 0.15% of $3,000 = $4.50b. For a used car, over 7 years, according to table 2 the customs duty is fixed
at 2.2 Euro/cc. For this example the customs tariff for engine capacity 1,875 cc will be = 1,875* 1.78 = $3,375.
c. Subtotal: $3,000+$4.50+$3,375= $6,380
2. The excise tax is 160*142 = 22,720 Rubles or $78136, which is a 26% increase in the vehicle’s price.
3. The new price of $7,161 is then accessed VAT; this adds 18% to the price for a new total of $8,450.
4. Finally, the Russian dealer’s 5% mark up brings the price to $8,872 which is almost triple the original purchase price.
33 Fixed charge for customs registration.34 Exchange rate for Euro set up by the Central Bank at 35.763 on 18/01/04, cross exchange-rate totals 1.23.35 Article 193, point 1 of the Tax Code of the Russian Federation.36 Exchange rate 18/01/04 for 1 USD is equal to 29.075 Rubles.
VI. Annexes 93
Figure 1
Price build up for imported Cars in Russia, Examples 1-2
100%
80%
60%
40%
20%
0%Example 1: New imported car Example 2: Used imported car
14,5%
16,2%
64,3%
4,8%
14,5%
8,8%
38,1%
33,8%
4,8%
0,2%Dealer mark up
VAT
Excise Duty
Custom tariff includingregistration free
Original CIF
Annex 12.Customs Duties on selected automotive parts as of January 28, 2004
Part Description Custom Duty
Tires, new pneumatic, of rubber 20% per piece but not less than 6.2 euro
Bodies for motor vehicles 15% per piece
Gear boxes 5% per piece
Suspension shock-absorbers:
Steering wheels, columns, boxes
Air-bags
Finding Quality Partners: A Review Of The Russian Automotive Component Sector94
Annex 13. Russian OEM Vehicles
AVTOVAZ MODELS
Klassica (VAZ 21043, VAZ 21053, VAZ 21070)
The “Klassica” is a slightly updated version of the Fiat car that AvtoVAZ was originally set up to produce in 1970. This car is also known as the “Zhiguli” or “Semerka” (Number 7). At the end of 2003, dealer prices for the Klassica were in the range of four to seven thousand US dollars.
Samara (VAZ 21083, VAZ 21093, VAZ 21099, VAZ 2115)
The Samara model started production in 1984 and has passed through many modifications since. At the end of 2003 dealer prices for Samara were in the range of five to seven thousand US Dollars. VAZ 21083 is also referred to as the “Vosmyerka” (Number 8) and models VAZ 21093, VAZ 21099 as the “Devyatka” (Number 9).
Niva (VAZ 2120, VAZ 2121, VAZ 2131)
The Niva is a small, four-wheel drive vehicle, produced since 1977 and modernized in 1993. The Niva is scheduled to be phased out in favor of the upgraded “Chevy Niva” version, produced at VAZ’s joint venture with General Motors. At the end of 2003, dealer prices for the Niva were in the range of nine to ten thousand US dollars, while at the end of 2003 Chevy Nivas were generally dealer priced at approximately twelve thousand US dollars. In 2003 GM-AvtoVAZ increased the real price of the Chevy Niva by converting dollar prices to the same number of euros.
VAZ-21043 (Klassica)
VAZ 2115 (Samara)
Niva-2121 Niva-2131
VI. Annexes 95
Lada (VAZ 2110, VAZ 2111, VAZ 2112)
Produced since 1996, the Lada is a C class car. It is also referred to as “Desyatka” (Number 10). Dealer prices for Ladas were in the range of $6,800 to $7,000 at the end of 2003.
VAZ 2111(Lada) VAZ 2112 (Lada)
Oka
Produced since 1979, the OKA car was originally designed to provide short distance transportation to the disabled. The car is produced at the AvtoVAZ “SeAZ” factory near Moscow as well as at KAMAZ (see below).
OKA Kalina 1117
Today only about 50% of Oka sales are to the disabled with the rest going to custom-ers looking for very-low-priced transportation. Dealer prices for the OKA by the end of 2003 were approximately $2,500.
RUSPROMAVTO (GAZ) MODELS
2004 Volga model
Finding Quality Partners: A Review Of The Russian Automotive Component Sector96
SOK GROUP (IZH-AVTO) MODELS
Izh 21171 Izh 2127
Fabula 4X4 Izh 2126
SEVERSTALAVTO (UAZ) MODELS
The UAZ “Hunter” is improved version of its existing 4x4 vehicle, which was the Soviet army small 4x4. The Hunter will have more engine options and has a slightly different grill than the earlier model. In late 2003, dealer pricing for the Hunter was approximately 6,000 US dollars. In 2002 UAZ introduced the Simbir SUV. In late 2003 dealer pricing for the Simbir was approximately 10,000 US dollars.
UAZ 3909 UAZ 3303
UAZ-SimbirUAZ -Hunter
VI. Annexes 97
Annex 14. Most Popular foreign Brands in Russia
Model Sales in 2003, units Change vs 2002, %
Toyota (4)* 25,075 +300
Ford (9) 20,712 +300
Daewoo (1) 20,255 +30
Mitsubishi (5) 17,663 +16
Hyundai (10) 14,561 +260
Kia (11) 12,420 +230
Renault (3) 11,237 +37,5
Nissan (6) 9,470 +18
Peugeot (7) 8,850 +23
Opel (2) 7,318 +255
Volkswagen (8) 6,335 – 7,1
Skoda (2) 6,291 – 33,3
Volvo 5,027 +72
Suzuki 4,044 +200
BMW 3,774 – 0,4
Honda 3,575 +270
Mercedes-Benz 3,205 +50
Citroen 3,160 +39
Audi 3,111 +15
Mazda 1,862 +300
Source: Izvestia(*) Rank of the company in 2002.
Annex 15. Top Selling Models of Foreign Cars Sold in Russia
Company Sold in 2003, units
Ford Focus (5) 15,876
Daewoo Nexia (1) 14,722
Toyota Corolla (11) 8,772
Mitsubishi Carisma (2) 7,867
Toyota Camry (14) 6,404
Hyundai Accent (7) 6,198
Daewoo Matiz (4) 5,533
Kia Rio 5,479
Hyundai Getz 4,132
Skoda Octavia (10) 3,611
Finding Quality Partners: A Review Of The Russian Automotive Component Sector98
Annex 16. Foreign OEM Vehicles
Ford Focus
Ford
The Chevy Niva
GM-AvtoVAZ
Renault Clio
Renault — JSC “AVTOFRAMOS”
Avtotor: KIA, BMW
KIA RIO The GM Hummer H2
BMW 5 seriesBMW 3 series
TagAZ: Hyundai, Daewoo, Citroen
The Hyundai Accent The Citroen Berlingo VP
VI. Annexes 99
Annex 17. Decree Of The President Of The Russian Federation No. 135Of February 5, 1998 On Additional Measures For Increasing InvestmentsFor The Development Of The Domestic Automobile Industry
(Translation provided by the Ernst and Young Company)
For the purpose of creating conditions for the development of the domestic automobile industry as one of the key sectors actively influencing the process of economic and social development of the country, I resolve:
1. To adopt the proposal of the Government of the Russian Federation on state support of large-scale projects for the creation and development of production capacity for the manufacturing of contemporary types of automobile trans-portation and automobile components (hereinafter called projects) including marketable components with the participation of foreign investors, which meet the following criteria:
the total amount of investment necessary for the realization of the project shall be composed of not less than 1500 million roubles in the course of five years, that is fixed in an investment agreement concluded between the investor and the federal organ of the executive power authorized by the Government of the Russian Federation. In the case of the participation of foreign investors in the authorized (constituent) capital of a Russian com-mercial organization carrying out the realization of the project, its share must consist of no less than 150 million roubles;
the share of the expenditures made on the territory of the Russian Federa-tion after the lapse of five years from the beginning of the realization of the project attributed to the prime cost shall compose not less than 50 per cent of the prime cost of the final product.
2. The Government of the Russian Federation shall determine the peculiarities of the legal regulation of the customs regime of a fee warehouse in regards to motor vehicles and automobile components made within the bounds of the realization of the project, having in mind in this case that:
the said motor vehicles and automobile components within the quotas, which have been established by the Government of the Russian Federation for each project, at the time of their export from the territory of free storage and im-port to the rest of the territory of the Russian Federation shall be considered originating from the Russian Federation:
when determining the said quotas it is necessary to proceed from the amount of actual annual investments in he realization of these projects, the
Finding Quality Partners: A Review Of The Russian Automotive Component Sector100
amount of the manufacturing of means motor vehicles and components and share of the expenditures made on the territory of the Russian Federation, and attributed to the prime cost of the final product;
in the case of the violations of the terms of this Decree and investment agreements mentioned in Item 1 of this Decree, the peculiarities of the customs regime of a free warehouse are not subject to application from the day of discovery of the said violations;
the time of application of the peculiarities of the customs of the customs regime of a free warehouse to the motor vehicles and automobile com-ponents made within the scope of a Project must not exceed the time of realization of this project, but cannot be more than seven years.
The State Customs Committee of the Russian Federation shall issue to Rus-sian commercial organizations (including with foreign investments), which are implementing the realization of projects, licenses for the establishment of free warehouses on the basis of decisions of the Government of the Russian Federation.
3. The Government of the Russian Federation shall develop within two months a procedure for the determination of:
origin of the motor vehicles and components stipulated by this Decree;
share of the expenditures made on the territory of the Russian Federation in the prime cost of the final product;
quantitative limitations for the application of the peculiarities of the cus-toms regime of a free warehouse stipulated by this Decree.
4. To recommend to the organs of the executive power of entities of the Rus-sian Federation on the territory of which are located the Russian commercial organizations implementing the realization of these projects to grant to these organizations within the limits of their authority additional privileges and guarantees.
President B. Yeltsinof the Russian FederationMoscow, the Kremlin
VI. Annexes 101
IFC Project Summary
This review was produced by the staff of the International Finance Corporation (IFC), Automotive Component Supplier Development Project, an IFC technical assistance project. Funding for the Project was provided by the United States Trade and Devel-opment Agency (USTDA) and partly by the IFC itself.
The goal of the Project is to demonstrate how companies working in the large Russian auto-motive components sector can improve enough to produce to international standards. Invest-ment into this important sector, employing tens of thousands, will support the production of higher quality automobiles in Russia, and create demand for new equipment and services as the sector modernizes.
The Project leverages the $150 Million investment of Ford Motor Company in its Vsevolozhsk car assembly plant, where Ford “Focus” automobiles are assembled. The Russian government has strongly motivated Ford to ‘localize’ components for the Focus through import tariff relief. The Project therefore leverages large Ford investments in regional localization offices and Ford’s planned purchases from Russian firms.
Project Client Firms
The project has three main objectives:
1. Improvement of the capabilities of Russian component suppliers to produce to international standards;
2. Improvement of the attractiveness of Russian component suppliers as invest-ment and partnering targets for foreign investors;
3. Development of local consulting capability for sustainable, long-term impact.
The Project has been working with four Russian automotive component producers, each of which is working with Ford in the Advanced Product Quality Process (APQP) to qualify as a supplier. They are: AvtoPribor factory, in Vladimir, AvtoTechnica in Nizhny Novgorod, Intercos-IV in Saint-Petersburg, and Continental Plast, also in Saint Petersburg.
With IFC assistance, Project client AvtoPribor of Vladimir, Russia, has created a mod-ern production cell to handle its Ford production and signed a production order with Ford in early 2003. AvtoPribor expects to certify its entire 8000-person factory to the international automotive quality standard, ISO/TS 16949, in 2004, having made sig-
Ford Focus
Finding Quality Partners: A Review Of The Russian Automotive Component Sector102
nificant progress as a result of the project. In addition to quality management system standards implementation, the Project has been also working on implementation of Toyota Production System, or Lean Production concepts, for more efficient and high quality production. Much of this work was done at AvtoPribor.
Project client Intercos-IV, of St. Petersburg, Russia, has developed an ISO-9001:2000 — compliant quality system and production area working together with project consul-tants. Intercos signed its production agreement with Ford in late 2003.
Project client AvtoTechnica, of Nizhny Novgorod has developed an ISO-9001:2000-compliant production area and factory procedures. A production contract with Ford is expected for AvtoTechnica in 2004. Work at Project client Continental Plast was just beginning as this document went to print.
1. OAO “AvtoPribor” FactoryVladimir City, 600016, 79 Nizhegorodskaya St.
Product line: Windshield wipers,
Speedometers; other instrument clusters.
General Director: Alexey Melnikov
Tel: 7 0922 32 45 12
Quality Director: Edward Raiter
Tel: + 7 (0922) 21-63-64
Fax: +7 (0922) 21-52-37
www.avtopribor.ru
2. ZAO “Intercos-IV”Saint-Petersburg, 197198, 25 A Bolshoy Pr. P.S.
Product line: large dies and molds;
other large- sized tooling, metal body stampings.
General Director: Timur Shoshtaev
Quality Manager: Alexey Ivanov
Tel: +7 (812) 232-14-76
Fax: +7 (812) 232-46-79
www.intercos-iv.ru
3. OOO “AvtoTechnica”Nizhny Novgorod, 603037, 6 Travyanaya St.
Product line: Floor, ceiling and trunk coverings;
sound insulation panels.
General Director: Sergey Konovalov
Tel: +7 (8312) 23-12-43
Fax: +7 (8312) 232-46-79
Project Activities
Development of local technical assistance capacity is a key Project strategy to enable sustainable change in the automotive sector. Local consultants can provide assistance at a small fraction of the cost of foreign specialists and without delays and misunder-standings caused by translation and interpretation.
VI. Annexes 103
The project has been working to develop the knowledge and skills of two small busi-ness in Russia which will be able to provide similar technical assistance throughout Russia after the end of the project. These are:
1. Synchron-Q, an American firm with offices in St. Petersburg2. Prioritet, a Russian firm in Nizhny Novgorod (http://www.centerprioritet.ru)
Both firms have demonstrated how highly competent Russian national consultants can provide excellent quality systems consulting for foreign projects. Both firms have enhanced their capabilities in the course of the project work:
• The project facilitated experience in intensive, day to day consulting on-site, as opposed to infrequent training visits;
• Ford Motor Company staff provided detailed information on how to satisfy general and specific customer quality system requirements;
• IFC staff provided the consultants with their first detailed exposure to Toyota Produc-tion System concepts and, in addition to concrete examples at the factories, provided books and other training materials that were not previously available to the firms.
Project Achievements and Results
After one year the main results for each of the initial Project companies were:
Avtopribor
� Signifi cant progress in ISO/TS 16949 implementation;
� Training and accomplishment of world-class Design Failure Mode Eff ects Analysis (DFMEA);
� Training and accomplishment of world-class Process Failure Mode Eff ects Analysis (PFMEA);
� Training and accomplishment of Measurement Systems Analysis and Statistical Process Control;
� Training in and use of Toyota Production System Concepts;
Intercos-IV
� Creation of an ISO-9001: 2000-compliant factory Quality Management System;
� Training and accomplishment of world-class Process Failure Mode Eff ects Analysis (PFMEA);
� Training and accomplishment of Measurement Systems Analysis and Statistical Process Control;
AvtoTechnica
� Creation of an ISO-9001: 2000-compliant factory Quality Management System;
� Training and accomplishment of world-class Design Failure Mode Eff ects Analysis (DFMEA);
� Training and accomplishment of world-class Process Failure Mode Eff ects Analysis (PFMEA);
� Training and accomplishment of Measurement Systems Analysis and Statistical Process Control;
Finding Quality Partners: A Review Of The Russian Automotive Component Sector104
Sponsoring Organizations
International Financial Corporation
IFC (www.ifc.org), is the largest multilateral source of loan and equity financing for private sector projects in the developing world. It promotes sustainable private sector development primarily by:
• Financing private sector projects located in the developing world. • Helping private companies in the developing world mobilize financing in in-
ternational financial markets. • Providing advice and technical assistance to businesses and governments.
The IFC Private Enterprise Partnership is IFC’s technical assistance program in Eastern Europe and Central Asia. Together with IFC’s donor partners the technical assistance program assists private companies and governments to:
• Attract private direct investment to all areas of the economies, • Stimulate the growth of small and medium-sized enterprises, • Improve the business enabling environment.
US Trade and Development Agency
The U.S. Trade and Development Agency (http://www.tda.gov) advances economic de-velopment and U.S. commercial interests in developing and middle income countries. The agency funds various forms of technical assistance, feasibility studies, training, orientation visits and business workshops that support the development of a modern infrastructure and a fair and open trading environment.